2. Currently, the unit selling price of a product is $360, the unit variable cost is $250,
and the total fixed costs are $935,000.
a. Compute the current break even
b. Compute the sales volume required to earn a target profit of $165,000.
3. Sales (15,000 units)
Production Costs (18,000)
Direct Materials
Direct Labor
variable Factory Overhead
Fixed Factory Overhead
2,400,000
990,000
540,000
225,000
153,000
Selling and Administrative Expenses
Variable selling and administrative
Fixed selling and Administrative
1,908,000
270,000
84,200
354,200
a. Prepare an income statement according to the absorption-costing concept
b. Will the income be the same using the variable costing concept? Explain? No
income statement required.
49
Dec-14
