question archive Kopi Company produces dog cages that are sold for $40 per unit
Kopi Company produces dog cages that are sold for $40 per unit
Subject:AccountingPrice:3.87 Bought7
Kopi Company produces dog cages that are sold for $40 per unit. The company produced and sold 6,000 dog cages during July 2017. There were no beginning or ending inventories. Variable and fixed costs follow.
| Variable Costs per Unit | Fixed Costs per Month | ||||||
|---|---|---|---|---|---|---|---|
| Manufacturing: | Manufacturing overhead | $40,000 | |||||
| Direct materials | $10 | Selling and administrative | 20,000 | ||||
| Direct labor | 2 | Total | $60,000 | ||||
| Manufacturing overhead | 5 | $17 | |||||
| Selling and administrative | 5 | ||||||
| Total | $22 | ||||||
Required
Prepare a contribution income statement for July.
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Answer:
| Kopi Company | ||
| Contribution Income Statement | ||
| For the Month of July 2017 | ||
| Sales ( 6,000 *$ 40) | 240,000 | |
| Less variable costs | ||
| Direct materials ( 6000 * $ 10) | 60,000 | |
| Direct labor ( 6000 *$ 2) | 12,000 | |
| Manufacturing overhead ( 6,000 *5) | 30,000 | |
| Selling and administrative ( 6,000 * $ 5) | 30,000 | 132,000 |
| Contribution margin ( Sales - Variable Cost) | 108,000 | |
| Less fixed cost: | ||
| Manufacturing overhead | 40,000 | |
| Selling and administrative | 20,000 | 60,000 |
| Profit ( Variable Cost - Fixed Cost) | 48,000 | |
