What is the contribution margin calculated on a

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Reference no: EM13621877

Holly Inc., has the following data regarding their business:

Planned & actual production: 38,000 units

Sales: 36,500 units at $12 per unit

Production costs - variable: $3.25 per unit

Production costs - fixed: $243,000

Selling and admin - variable: $0.95 per unit

Selling and admin - fixed: $31,000

For all of the below questions, assume that this is Holly Inc.'s first period in business.

1. What is the gross margin calculated on an absorption-costing income statement?

2. What is the contribution margin calculated on a variable-costing income statement?

3. What is the ending inventory figure for the period assuming they adopt absorption-costing?

4. What is the ending inventory figure for the period assuming they adopt variable-costing?

5. Is there a difference in income between absorption-costing and variable costing? If so, reconcile the difference.

Reference no: EM13621877

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