Question

1. Wang Co. manufactures and sells a single product that sells for $630 per unit; variable costs are $378 per unit. Annual fixed costs are $872,000. Current sales volume is $4,380,000. Management targets an annual pre-tax income of $1,305,000. Compute the dollar sales to earn the target pre-tax net income.

2.

A manufacturer reports the following information below for its first three years in operation.

	Year 1			Year 2			Year 3
Income under variable costing	$	86,000			119,000			125,000
Beginning inventory (units)		0			900			550
Ending inventory (units)		900			550			0
Fixed manufacturing overhead per unit	$	12.00		$	12.00		$	12.00

Income for year 3 using absorption costing is:

3.

During its most recent fiscal year, Dover, Inc. had total sales of $3,060,000. Contribution margin amounted to $1,430,000 and pretax income was $295,000. What amount should have been reported as variable costs in the company's contribution margin income statement for the year?

4.

During March, a firm expects its total sales to be $154,000, its total variable costs to be $94,400, and its total fixed costs to be $24,400. The contribution margin for March is:

Answer 1