Solution 18-10 wrong. Variable costs = 56% of sales Fixed costs = $187,100 Management’s net income g
Solution
18-10 wrong.
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
Solution
19-17
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.
Book only has
these categories:
Sales
$
2,060,000.0
admin expenses
variable cost
of godds sold
Less: Variable
costs
$
1,615,200.0
Contribtn
margin
variable
selling and admin expenses
fixed
manufacturing overhead
Contribution
margin
$
444,800.0
fixed selling
and admin expenses
Less: Fixed
costs
$
450,503.0
gross profit
net income/loss
Operating
profit
$ (5,703.0)
sales
total fixed
expenses
total variable
expenses
d) Absorption
costing income statement:-
POLK COMPANY
Income
statement
For the year
ended December 31, 2012
Absorption
costing
Have to show
debit and credit columns
Categories
Wrong
Amt.
Book only has
these categories:
Sales
$
2,060,000.0
admin expenses
variable cost
of godds sold
Less: Cost of
goods sold
$
1,496,800.0
Contribtn
margin
variable
selling and admin expenses
fixed
manufacturing overhead
Gross margin
$
563,200.0
fixed selling
and admin expenses
Less: Selling
and admin expenses
$
568,903.0
gross profit
net income/loss
Operating
profit
$ (5,703.0)
sales
total fixed
expenses
total variable
expenses
