Reference no: EM132591030
Stuart Manufacturing produces metal picture frames. The company's income statements for the lasttwo years are given below:
Last year This year
Units sold 50,000 70,000
Sales $800,000 $1,120,000
Less cost of goods sold 550,000 710,000
Gross margin 250,000 410,000
Less operating expenses 150,000 190,000
Net income $100,000 $ 220,000
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 ththis is a manufacturing firm.)
Question b. Compute the company's contribution margin for this year.