Discussion Post: Drake & Dean
• Drake Company's income statement for the most recent year appears below. Sales (45,000 units) $1,350,000 Less: variable expenses 750,000 Contribution margin 600,000 Less: fixed expenses 375,000 Net operating income $225,000
Task:
o Calculate the unit contribution margin.
o Calculate the break-even point in dollars.
o If the company desires a net operating income of $290,000, how many units must it sell?
• The Dean Company produces and sells a single product. The following data refer to the year just completed: Selling price $450 Units in beginning Inventory 0 Units produced 25,000 Units sold 22,000 Variable costs per unit: Direct materials $ 200 Direct labor $ 50 Variable
manufacturing overhead $ 30 Variable selling and admin $ 15 Fixed Costs: Fixed manufacturing overhead $ 275,000 Fixed selling and admin $ 230,000 Assume that direct labor is a variable cost.
Task:
o Compute the cost of a single unit of product under both
o The absorption costing and variable costing approaches.
o Prepare an income statement for the year using absorption costing.
o Prepare an income statement for the year using variable costing.
The response should include a reference list. One-inch margins, Using Times New Roman 12 pnt font, double-space and APA style of writing and citations.