Question

Therrell Corporation has two divisions: Bulb Division and Seed Division. The following is their contribution format income statement for the most recent operating period:

Total Company Bulb Division Seed Division Sales $ 770,000 $ 527,000 $ 243,000 Variable expenses 365,300 286,870 78,430 Contribution margin 404,700 258,560 154,570 Fixed Expenses 283,750 Net operating income $ 120,950

Required: (You must show your work.)

What is the company’s overall break-even in sales dollars (round CM% to two decimal places, for example 72.31%, and sales to nearest dollar)?

Katen Industries’ Cost of Goods Manufactured for the just completed month was $227,000 and its Finished Goods inventory was as follows: Beginning Ending Finished goods inventory $ 51,000 $ 59,000 Required: (You must show your work.)

Prepare Katen’s Statement of Cost of Goods Sold for the period assuming no underapplied or overapplied overhead in the space provided:

Answer 1

1.)	Contribution Margin ratio	52.56%	=404700/770000
	Company’s overall break-even in sales dollars	$ 539,859	=283750/52.56%
2.)		Amount $
	Cost of Goods Manufactured	227,000
	Add: Beginning Finished goods inventory	51,000
	Less: Ending finished goods inventory	-59,000
	Cost of Goods sold	2,9,000