Define variable costing income statement

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Reference no: EM13487264

Variable costs = 56% of sales
Fixed costs = $187,100
Management's net income goal = $82,092

Contribution margin ratio = (100%-variable cost percentage)
Contribution margin ratio = (100%-56%)
Contribution margin ratio = 54%

Required sales to reach target income of $82,092 = (Total fixed cost + Target income)/(Contribution margin ratio)
Required sales to reach target income of $82,092 = (187100+82092)/54%
Required sales to reach target income of $82,092 = $498,503.7
Answer wrong according to book


a) Manufacturing cost per unit (variable costing) = Direct material + Direct labor + Variable manufacturing overhead
Manufacturing cost per unit (variable costing) = $7.73 + $2.52 + $5.92
Manufacturing cost per unit (variable costing) = $16.17 per unit


b) Variable costing income statement:-

POLK COMPANY
Income statement
For the year ended December 31, 2012
Variable costing

 

Have to show debit and credit columns Categories Wrong
  Amt.
Sales  $        2,060,000.0
Less: Variable costs  $        1,615,200.0
   
Contribution margin  $            444,800.0
Less: Fixed costs  $            450,503.0
   
Operating profit  $              (5,703.0)
   

Reference no: EM13487264

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