Contribution income statement for cookie manufacture

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Reference no: EM133971634

Question

A contribution income statement for a cookie manufacture for a month follows. Contribution Margin Income Statement Sales ( 48,000 units x $100 ) $4,800,000 Less variable costs Direct materials ( 48,000 units x $13 ) $624,000 Direct labor ( 48,000 units x $13 ) 624,000 Variable factory overhead ( 48,000 units x $5 ) 240,000 Selling and administrative ( 48,000 units x $3 ) 144,000 1,632,000 Contribution margin ( 48,000 units x $66 ) $3,168,000 Less fixed costs Factory overhead 1,440,000 Selling and administrative 960,000 2,400,000 Net income (loss) $768,000 The company is considering a purchase of assembly line equipment that would reduce monthly direct labor costs by $6 per unit , increase monthly variable overhead costs by $2 per unit, and increase fixed factory overhead by $72,000 per month. What is the net impact on monthly profits?

Reference no: EM133971634

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