please help me solve whole problem Instructions Suppose that Larimer Company sel

Question

please help me solve whole problem

Instructions Suppose that Larimer Company sells a product for $20. Unit costs are as follows: Direct materials Direct labor Variable factory overhead Variable selling and administrative expense 1.05 $2.10 1.25 2.00 Total foxed factory overhead is $56,590 per year, and total fixed selling and administrative expense is $38,610. Required: 1. Calculate the variable cost per unit and the contribution margin per unit. 2. Calculate the contribution margin ratio and the variable cost ratio. 3. Calculate the break-even units. 4. Prepare a contribution margin income statement at the break-even number of units. Enter all amounts as positive numbers.

Explanation / Answer

1 Variable cost per unit Direct materials 2.1 Direct labor 1.25 Variable factory overhead 2 Variable selling and administrative expense 1.05 Total Variable Cost 6.4 Contribution Margin per unit Sales price - variable costs 20-6.4 13.6 2 Contribution margin ratio Contribution margin / sales price 68% 13.6/20 Variable Cost Ratio Variable Cost / Sales 6.4/20 32% 3 Break even point Fixed Cost / Contribution per unit (56590+38610)/13.6 7000 4 Larimer Company Contribution Margin Income Statement for the coming year Sales 20*7000 140000 Less:Total Variable Expense 6.4*7000 44800 Total Contribution Margin 95200 Less: Fixed Cost (56590+38610) 95200 Net Income 0

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