Johnson company produced10000 units and sold 9000units in

Reference no: EM13566106

1)Rocky Company has signed a contract that requires them to produce and sell Gadgets for$10 per unit. A recent study of costs indicatedthat their fixed production and fixed sellingand administrative costswere $100,000 and $40,000 respectively. Variable production costs were discovered to be $4 per unit while their variable selling and administrative costs are $2 per unit. Rocky'stax rate is 30 percent

Required:

a)What is the net income for Rocky Company if sales are 60,000 units?

b)What are the sales quantity in units needed to obtain an after-taxprofit of $21,000?

2)Ferris Corporation has the followingbudgeted operating results for 2013:

Revenues (10,000 units @ $50) Variable costs:		$500,000
Manufacturing	$200,000
Selling	60,000	260,000
Contribution inargin		$240,000
Fixed costs:
Manufacturing	$80,000
Selling	50,000	130000
Operating income		$110.000

Required:

a)Should the company produce a special order for 3,000 units for $30 pet unit? Justify your answer. If Ferris Corporation acceptsthe special order, they must produce and sell the entire 3,000 units for $30

3) Johnson Company produced10,000 units and sold 9,000units in theyear 2013. Beginning inventory was zero.The selling pricewas $60. Dilringthe period, the following costswere incurred:

Fixed manufacturing overhead $90,000

Fixed selling and administrative expenses 100,000

Variable manufacturing overhead 50,000

Variable sellingexpenses, per unit 6

Direct labor, per unit 10

Direct materials, per unit 11

Tax rate is 3 percent.

Required:

a. Calculateeach of the following:

i.V11riableproduction cost perunit

ii.Full absorption costper unit

iii.Variable costper unit

iv.Full (total)cost per unit

v.Contributionmargin per unit

vi.Gross margin per unit

Reference no: EM13566106

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