Evaluate the company total variable cost per unit

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Reference no: EM132555387

Stuart Manufacturing produces metal picture frames. The company's income statements for the last two years are given below

Last Year This Year

Unit sold 50000 70000

Sales 800000 1120000

Less: Cost of goods sold 550000 710000

Gross margin 250000 410000

Less: Operating expenses 150000 190000

Net income 100000 220000

The company has no beginning or ending inventories.

Required:

Question a. Estimate the company's total variable cost per unit and its total fixed costs per year. (Remember that this is a manufacturing firm.)

Question b. Compute the company's contribution margin for this year.

Reference no: EM132555387

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