Compute break even assuming direct materials cost, Cost Accounting

Assignment Help:

Below find production and sales information for Herrestad Company. We will use this same company for all the SLPs in this course. 

Product information

 

Beginning inventory

0  

Units produced

 10,000

Units sold

 8,000

 

 

Selling price per unit

 $300

Variable costs per unit

 

  Direct material

 120

  Direct labor

 60

  Variable overhead

 40

  Variable selling and administrative

 10

 

 

Fixed costs

 

  Fixed manufacturing overhead

 250,000

  Fixed selling and administrative

 100,000

 

 

Herrestad Company

Absorption Income Statement

For the period ending Dec. 31, 2011

 

 

Sales

 $2,400,000

Cost of goods sold

 1,960,000

  Gross profit (margin)

 $440,000

Selling and administrative expenses

 180,000

  Net income

 $260,000

Required:

Prepare a contribution margin (behavioral, variable) income statement for Herrestad Company. Prepare a second version assuming the selling price per unit increases to $320 per unit.

Use the original information to:

  • Determine the number of units the company must sell to break even for the year?
  • Compute break even assuming direct materials cost increase from $120 to $140, but all information remains the same.

The submission should be 2 to 4 pages and need to include answers to all the questions listed above. Show computations, discuss the results and include references in APA format.


Related Discussions:- Compute break even assuming direct materials cost

Definitions of manufacturing concepts interstate, Definitions of manufactur...

Definitions of manufacturing concepts  Interstate Manufacturing produces brass fasteners and incurred the following costs for the year just ended:  Materials and supplies used

Compute the cost of goods sold, The following data (in thousands of dollars...

The following data (in thousands of dollars) have been taken from the accounting records of Barn Burner Corporation for the just completed year.       Sales

Compute the manufacturing overhead costs, Go the Hershey website to learn h...

Go the Hershey website to learn how to make Hershey chocolate. Review the process and take a look at some of the videos. Pay particular attention to the process steps of milling an

Break even point, Campground Inc. is considering the production and sale of...

Campground Inc. is considering the production and sale of propane lamps. Annual fixed costs associated with the project are expected to total $60,000. In addition, each lamp would

Cvp analysis, the formula of culculating product cost per unit

the formula of culculating product cost per unit

Calculate the cost of capital and units of capital, The owner of the Hughes...

The owner of the Hughes Car Wash believes that the relationship between the number of cars washed and the amount of labor employed is Q = 0.8 + 4.5 L - 0.3 L2 where Q = the num

Fixed overheads variance, Fixed Overheads Variance This is defined lik...

Fixed Overheads Variance This is defined like the difference between the fixed overheads attributed and the standard cost of fixed overheads absorbed in the production achieve

Compute holly''s profit margin, The income statement of Holly Enterprises s...

The income statement of Holly Enterprises shows operating revenues of $134,800, selling expenses of $38,310, general and administrative expenses of $36,990, interest expense of $58

Cost benefit approach - terms used in cost accounting, Cost Benefit Approac...

Cost Benefit Approach - Terms Used in Cost Accounting Is the primary criterion for selecting with alternative accounting approaches? There is a direct relationship in a co

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd