Beverly High Fashions Company manufactured and sold $1000 pair of leather handbags during July
Select the following data:
Sales $110,000
Direct materials used $31,000
Direct Labor $16,000
Variable manufacturing overhead $13,000
Fixed manufacturing overhead $11,000
Variable selling & administrative expenses
Selling & administrative expenses
Contribution margin $40,000
Operating income $22,000
1. What were the variable selling and administrative expenses for July?
2. What were the fixed selling and administrative expenses for July?
3. What was the cost of goods sold during July?
4. Without prejudice to your earlier answers, assume that the fixed selling and administrative expenses for July amounted to $4000.
a. What was the break-even point in units for July?
b. How many units must be sold to earn a target operating income of $ 14,000?
c. What would the selling price per unit have to be if the company wanted to earn an operating income of $22,500 on the sale of 900 units?