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edugen wileypluss.com Wiley PLUS on Chegg.com g q Wiley PLUS: My WileyPLUS tact U Log Out Wiley PLUS Weygandt, Accounting Principles, 11e FINANCIAL ACCOUNTING (AC 221) Home Read, Study & Practice Gradebook Assignment Open Assignment CAL.cULATOR FULL scREEN PRINTER ON BACK NEXT ASSIGNMENT RESOURCES Problem 22-5A (Part Level Submission) Ch 22 Homework 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 22-1A (Part and 61% fixed direct materials $532,000; direct labor $311,000; administrative expenses $291,000 (19% variable and 81% fixed manufacturing overhead Level Submission) $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 yea t has projected that unit 22-5A (Pa sales will increase by 10% next year. Review Score (a) Review Results by Study Objective Your answer is partially correct. 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 contribution margin for the current year 555030 The contribution margin for the projected year 610553 Total fixed costs 537710 SHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 1 of 1 used License Agreement l Privacy Policy I 2000-2016 John Wiley & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. 4.17.3.3

Explanation / Answer

Particulars

Total

Variable

Fixed

Direct Material

$ 532,000

Direct Labor

$ 311,000

Selling Expenses

$ 271,000

$ 105,690

$ 165,310

Administrative Exp

$ 291,000

$ 55,290

$ 235,710

Manfacturing Overhead

$ 371,000

$ 255,990

$ 115,010

Total

$ 1,776,000

$ 1,259,970

$ 516,030

No of units sold

121,000

Variable Cost per Unit

10.413

Sales

$ 1,815,000

Sales in units

121,000

Sellling Price

$ 15.00

Contribution Per unit( Selling Price- Variable Cost per unit)

$ 4.59

Total Contribution

$ 555,030.00

Projected Contribution @ 10 % increase(555,030 x 110%)

$ 610,533.00

The contribution Margin for the current year= $555,030

The Contribution Margin for Projected year=$610,533

Total Fixed Costs=$516,030

Contribution Margin Ratio= Contribution Margin / Sales x 100 =555,030/1,815,000 x1000=30.58%

B2) Break Even point in units= Fixed cost / Contribution per unit=$516,030/4.59=112,498 units

Break Even point in units= Fixed cost / Contribution Margin Ratio= $516,030/30.58%=$1,687,466