Reference no: EM132459622
Problem I. Please make a contnbution margin income statement at normal capacity and label the ncomo statement as Figure 1. Please display the following formal and show columns roe totals and per unit. Assume that sales are priced at the normal price
Problem 2 Assume sales and demand for 2020 are 2.000 units. what would be the mnimum price that you would charge it you wanted to make a profit. Why is the the correct price? Please explain your calculations and reference to the chart in Figure 1.
Problem 3.1f demand for 20201s instead 3.003 suds should the company pay to increase their capacity? Why? Please explain your calculations and reference to the than in Figure 1. Assume Dints are sold al the normal price.
Mint II you expand capacity. you will have to pay additional fixed costs of 525.000 Remember that fixed costs are fixed within he relevant range If you expand capacay then you are outside this range. ft you expand capacity then you can make revenue on I .000 addrsonal units and would pay variable costs on 1.000 additional units. Please con eider the incremental profit or loss of expanding capacity. II Oro incremental profit of expanding capacity is positive men you should do so.
Problem 4. Assure sales and demand are 1.500 unrts. how much will tho company make on tho sadof tho non unit 11 501' 19 Discuss whch costs will charge it the company makes and sells one more unit Will the company make a profit on the unit if they sell at a price below your answer in 29 Please discuss your calculations and reference to Figure I.
Direct labor ........................................................................ $118.000
Advertising .......................................................................... $50.000
Factory supervision ............................................................. $40.000
Property taxes, factory building ............................................. $3.500
Sales commissions ............................................................. $80.000
Insurance. factory .................................................................. $2.500
Depreciation. administrative office equipment ...................... $4.000
Lease cost, factory equipment ............................................ $12.000
Indirect materials. factory ...................................................... $6.000
Depreciation, factory building .............................................. $10.000
Administrative office supplies (billing) ................................... $3.000
Administrative office salaries ............................................... $60.000
Direct materials used (wood. bolts. etc.) ............................. $94.000
Utilities, factory .................................................................... $20.000