Wildhorse Corporation has collected the following information after its first year of sales. Sales were $1,250,000 on 125,000 units, selling expenses $250,000 (40% variable and 60% fixed), direct materials $496,000, direct labor $34,900, administrative expenses $280,000 (20% variable and 80% fixed), and manufacturing overhead $358,000 (70% variable and 30% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year. Collapse question part (a) Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year.) (1) Contribution margin for current year $ Contribution margin for projected year $ (2) Fixed Costs
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Ответ:
Contribution Margin for current year $312,500
Total Fixed Costs 481,400
Contribution Margin for projected year $373,450
Fixed Costs for the projected year will remain same 481,400
Explanation:
Wildhorse Corporation
Sales $1,250,000
Direct materials $496,000,
Direct labor $34,900,
Manufacturing overhead
Variable (70% ) of $358,000= 250,600
Manufacturing Margin 468,500
Administrative expenses
Variable (20% )of $280,000= 56,000
Selling expenses
Variable (40% )of $250,000= 100,00
Total Variable Costs 910,500
Contribution Margin for current year $312,500
Total Fixed Costs 481,400
Selling expenses
Fixed 60% of ,$250,000= 150,00
Administrative expenses
Fixed 80% of $280,000= 224,000
Manufacturing overhead
Fixed 30% of $358,000 = 107,400
Wildhorse Corporation
Sales $1, 375,000
Costs / no of units = ( $1,250,000/125,000= $10 per unit )
( 125000+12500= 137,500 units * units price = $ 10 = 13750,000)
Total Variable Costs 910,500 for 125,000 units
Unit Variable Costs =910,500/ 125,000 units =$ 7.284
Total variable costs for 137,500 units = $ 1001550
Contribution Margin for projected year $373,450
We calculate the total variable costs and get the unit variable costs by dividing with the number of units given. Now we multiply it with additional 10 % increase in the units to get the Contribution Margin for projected year .
Fixed Costs for the projected year will remain same 481,400
Selling expenses
Fixed 60% of ,$250,000= 150,00
Administrative expenses
Fixed 80% of $280,000= 224,000
Manufacturing overhead
Fixed 30% of $358,000 = 107,400
Ответ:
it is the process of managing money and other similar assets in a way that is considered productive and is also in the best interest of the individual, the family, or the business company.