Question

Estrada Corporation produced 212,000 watches that it sold for $16 each during 2019. The company determined...

Estrada Corporation produced 212,000 watches that it sold for $16 each during 2019. The company determined that fixed manufacturing cost per unit was $8 per watch. The company reported a $636,000 gross margin on its 2019 financial statements.

Determine the variable cost per unit, the total variable cost, and the total contribution margin.

Homework Answers

Answer #1

Sales-Cost of goods sold=Gross margin

Sales=212,000*$16=$3,392,000

Cost of goods sold=$3,292,000-$636,000

Cost of goods sold=$2,756,000

Total cost of goods sold=Fixed cost+Variable cost
Fixed cost=212,000*$8

Fixed cost=$1,696,000

Variable cost=$2,756,000-$1,696,000

Variable cost=$1,060,000
Variable cost per unit=Total variable cost/number of units

Variable cost per unit=$1,060,000/212,000

Variable cost per unit=$5

Total contribution margin=Sales-Variable cost

Total contribution margin=$3,392,000-$1,060,000

Total contribution margin=$2,332,000

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
During its first year of operation Mazer Manufacturing Company produced 11,500 units of inventory and sold...
During its first year of operation Mazer Manufacturing Company produced 11,500 units of inventory and sold 2,750 units. Mazer incurred variable product cost of $2.1 per unit and $16,560 of fixed manufacturing overhead costs. The sales price of the products was $11.5 per unit. Determine the amount of gross margin Mazer would report if the company uses absorption costing and net income using variable costing. (Do not round intermediate calculations.)
Duffy Corporation, a merchandising company, reported the following results for year 2014: Number of units sold...
Duffy Corporation, a merchandising company, reported the following results for year 2014: Number of units sold 5,000 units Selling price per unit $200 per unit Unit cost of goods sold $120 per unit Variable selling expense per unit $18 per unit Total fixed selling expense $28,000 Variable administrative expense per unit $15 per unit Total fixed administrative expense $120,000 What is the contribution margin for Duffy Corporation in year 2014? A. $765,000 B. $235,000 C. $400,000 D. $835,000
Duffy Corporation, a merchandising company, reported the following results for year 2014: Number of units sold...
Duffy Corporation, a merchandising company, reported the following results for year 2014: Number of units sold 5,000 units Selling price per unit $200 per unit Unit cost of goods sold $120 per unit Variable selling expense per unit $18 per unit Total fixed selling expense $28,000 Variable administrative expense per unit $15 per unit Total fixed administrative expense $120,000 What is the contribution margin for Duffy Corporation in year 2014? A. $765,000 B. $235,000 C. $400,000 D. $835,000
Diego Company manufactures one product that is sold for $75 per unit in two geographic regions—the...
Diego Company manufactures one product that is sold for $75 per unit in two geographic regions—the East and West regions. The following information pertains to the company’s first year of operations in which it produced 46,000 units and sold 42,000 units. Variable costs per unit: Manufacturing: Direct materials $ 25 Direct labor $ 20 Variable manufacturing overhead $ 2 Variable selling and administrative $ 4 Fixed costs per year: Fixed manufacturing overhead $ 644,000 Fixed selling and administrative expense $...
Venus Corporation incurred fixed manufacturing costs of 27,000 € during 2019. Other information for 2019 includes:...
Venus Corporation incurred fixed manufacturing costs of 27,000 € during 2019. Other information for 2019 includes: The budgeted denominator level is 2,400 units. Units produced total 2,700 units. Units sold total 1,900 units. Variable cost per unit is 6 € Beginning inventory is zero. Under normal absorption costing, total manufacturing costs expensed on the income statement (excluding adjustments for variances) total ________. 21,375 € 32,775 € 30,400 € 30,375 €
Fanelli Corporation, a merchandising company, reported the following results for July: Number of units sold 6,900...
Fanelli Corporation, a merchandising company, reported the following results for July: Number of units sold 6,900 Selling price per unit $ 620 Unit cost of goods sold $ 421 Variable selling expense per unit $ 55 Total fixed selling expense $ 126,400 Variable administrative expense per unit $ 34 Total fixed administrative expense $ 208,300 Cost of goods sold is a variable cost in this company. Required: a. Prepare a traditional format income statement for July. b. Prepare a contribution...
coolpak company produced and sold 50,000 backpacks during the year just ended at an average price...
coolpak company produced and sold 50,000 backpacks during the year just ended at an average price of $20 per unit. Variable costs Including both manufacturing and marketing costs) were $14. Total fixed cost amounted to $210,000. There was no year end work in process inventory. A.Determine Coolpaks unit contribution B Determnine Coolpaks contribution margin ratio. C. Compute Coolpaks break even point in units for the year D. compute coolpaks break even point in sales dollars for the year E. What...
Diego Company manufactures one product that is sold for $73 per unit in two geographic regions—the...
Diego Company manufactures one product that is sold for $73 per unit in two geographic regions—the East and West regions. The following information pertains to the company’s first year of operations in which it produced 44,000 units and sold 39,000 units. Variable costs per unit: Manufacturing: Direct materials $ 23 Direct labor $ 16 Variable manufacturing overhead $ 2 Variable selling and administrative $ 4 Fixed costs per year: Fixed manufacturing overhead $ 748,000 Fixed selling and administrative expense $...
Columbia Products produced and sold 1,200 units of the company’s only product in March. You have...
Columbia Products produced and sold 1,200 units of the company’s only product in March. You have collected the following information from the accounting records: Sales price (per unit) $ 130 Manufacturing costs: Fixed overhead (for the month) 12,000 Direct labor (per unit) 10 Direct materials (per unit) 33 Variable overhead (per unit) 24 Marketing and administrative costs: Fixed costs (for the month) 16,800 Variable costs (per unit) 3    a. Compute the following:    a. Compute the following:    a....
Baxter Corporation, a merchandising company, reported the following results for July: Number of units sold (normal...
Baxter Corporation, a merchandising company, reported the following results for July: Number of units sold (normal operating level) 4,900 Selling price per unit $610 Unit cost of goods sold (90% variable, 10% fixed) $430 Variable selling expense per unit $38 Total fixed selling expense $134,600 Variable administrative expense per unit $32 Total fixed administrative expense $196,500 Required: a. Prepare a traditional format income statement for July. b. Prepare a contribution format income statement for July.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT