Mozena Corporation has collected the following information after its first year

Question

Mozena Corporation has collected the following information after its first year of sales. Sales were $1,815,000 on 121,000 units; selling expenses $271,000 (39% variable and 61% fixed); direct materials $532,000; direct labor $311,000; administrative expenses $291,000 (19% variable and 81% fixed); manufacturing overhead $371,000 (69% variable and 31% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year. Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year.) The parts of this question must be completed in order. This part will be available when you complete the bove. Compute contribution margin ratio. (Round unit variable cost calculations to 2 decimal places, e.g. 11.52 and the final answer to 2 decimal places, e.g. 25.52%.) The parts of this question must be completed in order. This part will be available when you complete the bove. The parts of this question must be completed in order. This part will be available when you complete the bove. The parts of this question must be completed in order. This part will be available when you complete the bove.

Explanation / Answer

Current year Projected Year Unit Rate/Unit Amount Unit Rate/Unit Amount Nos $ $ Nos $ $ Sale          121,000         15.00          1,815,000        133,100         15.00          1,996,500 Less:- Variable Cost Direct Material          121,000           4.40              532,000        133,100           4.40              585,200 Direct Labour          121,000           2.57              311,000        133,100           2.57              342,100 Administration Exp          121,000           0.46                55,290        133,100           0.46                60,819 (19% of 291000) Manufacturing Overhead          121,000           2.12              255,990        133,100           2.12              281,589 (69% of 371000) Selling Exp          121,000           0.87              105,690        133,100           0.87              116,259 (39% of 271000) Variable Cost          121,000         10.41          1,259,970        133,100         10.41          1,385,967 Contribution              555,030              610,533 Total Fixed Cost Administration Exp              235,710              235,710 (81% of 291000) Manufacturing Overhead              115,010              115,010 (31% of 371000) Selling Exp              165,310              165,310 (61% of 371000) Total Fixed Cost              516,030              516,030 Profit                39,000                94,503 Contribution Margin Ratio 30.6% 30.6% (Contribution/Sales)

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.