Compute break even assuming direct materials cost, Cost Accounting

Assignment Help:

Below find production and sales information for Herrestad Company. We will use this same company for all the SLPs in this course. 

Product information

 

Beginning inventory

0  

Units produced

 10,000

Units sold

 8,000

 

 

Selling price per unit

 $300

Variable costs per unit

 

  Direct material

 120

  Direct labor

 60

  Variable overhead

 40

  Variable selling and administrative

 10

 

 

Fixed costs

 

  Fixed manufacturing overhead

 250,000

  Fixed selling and administrative

 100,000

 

 

Herrestad Company

Absorption Income Statement

For the period ending Dec. 31, 2011

 

 

Sales

 $2,400,000

Cost of goods sold

 1,960,000

  Gross profit (margin)

 $440,000

Selling and administrative expenses

 180,000

  Net income

 $260,000

Required:

Prepare a contribution margin (behavioral, variable) income statement for Herrestad Company. Prepare a second version assuming the selling price per unit increases to $320 per unit.

Use the original information to:

  • Determine the number of units the company must sell to break even for the year?
  • Compute break even assuming direct materials cost increase from $120 to $140, but all information remains the same.

The submission should be 2 to 4 pages and need to include answers to all the questions listed above. Show computations, discuss the results and include references in APA format.


Related Discussions:- Compute break even assuming direct materials cost

Tracking overhead, Tracking Overhead Jack would have a many task at han...

Tracking Overhead Jack would have a many task at hand if he tried to daily trace all such items of overhead. For example: x     How difficult it would  become to track the "

Prepare the consolidated balance sheet, H Bhd has a 75% holding in the ordi...

H Bhd has a 75% holding in the ordinary shares of S Sdn Bhd and 40% in A Sdn Bhd. Shares in S were acquired  in 2006 when its retained earnings were RM120 million.  The shares in A

Calculate the put price, Question: Suppose that the stock now sells at ...

Question: Suppose that the stock now sells at $80, and the price will go up by 5% or down by 5% at the end of first six month (t = ½).  Then, the price will either go up by 10%

#title., how does idle capacity effect cost behavior patterns and factory o...

how does idle capacity effect cost behavior patterns and factory overhead application methods

Direct labour rate variance, Direct Labour Rate Variance It is the dif...

Direct Labour Rate Variance It is the difference among the actual direct labour rate and the standard direct labour rate for the total hours worked. Utilizing an equation,

Planning Budgetting, Bugga Corp expects to sell 3,000 units in October, and...

Bugga Corp expects to sell 3,000 units in October, and expects sales to increase 20% each month thereafter. Sales price is expected to stay constant at $8 per unit. What are budge

Difference between expenses and expenditure, The difference among expenses ...

The difference among expenses and expenditure. Expense is the outflow from a profit oriented organization whereas expenditure is the outflow from non-profit organization.

Direct and indirect costs, Direct and Indirect costs Recall such direc...

Direct and Indirect costs Recall such direct costs are costs which can be traced particularly to the end product of the production procedure while indirect costs cannot be so

Why is the statement of cash flows useful, Explain:- Q Why is the statem...

Explain:- Q Why is the statement of cash flows useful? Q. How is it possible for a company to suffer a net loss for a given year, yet produce a positive net cash flow from opera

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd