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Accounting

Suppose that Adams Company sells a product for $19. Unit costs are as follows:

Direct materials	$1.95
Direct labor	1.50
Variable factory overhead	2.05
Variable selling and administrative expense	0.96

Total fixed factory overhead is $51,658 per year, and total fixed selling and administrative expense is $38,630.

	Required:
1.	Calculate the variable cost per unit and the contribution margin per unit.
2.	Calculate the contribution margin ratio and the variable cost ratio.
3.	Calculate the break-even units.
4.	Prepare a contribution margin income statement at the break-even number of units.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92640150

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