I don't know what to do with all the various costs for a CVP income statement in a variable analysis. 300,000 units sold. $8 per unit. Manufacturing costs based on production volume of 300,000 units. Direct materials .80 per unit; Direct Labor $10 per hour or $2 per unit; Packaging .75 per unit; Variable Manufacturing Overhead 1.20 per unit; Fixed Manufacturing Overhead $540,000. Selling and Admin Costs (based on sales volume of 300,000 units); Sales commisions .80 per unit; shipping costs .50 per unit; adversting and promotion (fixed) $180,000; fixed selling and Admin expenses $270,000. So what do I do with all the various costs? What is included as a fixed or variable cost?
Variable costs | |
Particulars | Amount |
Direct material (300000*0.80) | 240000 |
Direct labour(300000*2) | 600000 |
Packaging (300000*0.75) | 225000 |
Variable manufacturing overhead(300000*1.2) | 360000 |
Sales commission (300000*0.80) | 240000 |
Shipping(300000*0.50) | 150000 |
Total variable cost | 1815000 |
Fixed costs | |
Particulars | Amount |
Fixed manufacturing overhead | 540000 |
Fixed advertising and promotion | 180000 |
Fixed selling and administration | 270000 |
Total fixed costs | 990000 |
Get Answers For Free
Most questions answered within 1 hours.