Question

Jasmine Company had the following amounts:

• Direct materials $10 per unit
• Direct Labor $27 per unit
• Variable overhead $2.50 per unit
• Fixed overhead $75,500
• Variable selling expenses $4 per unit
• Fixed selling and administrative expenses $125,000
• 65,000 units produced
• 57,000 units sold
• Sales price per unit is $52 each

Calculate the VARIABLE product cost per unit and prepare a Contribution Margin Income Statement under Variable Costing in order to fill in the rest of the information.

Variable product cost per unit $

Total Sales in dollars $

Contribution Margin    $

Net Income $

Answer 1

• Requirements

Direct material	$10.00
Direct kabor	$27.00
Variable overhead	$2.50
Total Variable product cost per unit	$39.50

--Contribution margin Income Statement

	Amount	per unit
Sales [57000 units x $ 52]	$2,964,000	$52.00
Less-Variable cost:
Variable product cost [57000 x $ 39.50]	$2,251,500	$39.50
Variable selling expenses [57000 x $4]	$228,000	$4.00
Contribution margin	$484,500	$8.50
Less- Fixed Costs:
Fixed overhead	$75,500
Fixed selling & admin	$125,000
Net Income	$284,000

Variable product cost per unit	$39.50
Total Sales in dollars	$2,964,000
Contribution margin	$484,500
Net Income	$284,000