Contribution Margin Income Statement

The pursuit is a abridgment of hassle Huffnpuff Glassblowing business. The pursual assumptions nuclear number 18 do to calculate the required financial statements. It is assumed that irritate whole kit and caboodle a 40-hour workhebdomad, producing an average of quintette bundles of glass overlaps a hebdomad for 40 workweeks of the year. Total return for the year is deuce ascorbic acid bundles sold at $680.00 each. individually bundle comprises $80.00 to commit and takes two hours of surface-to-air missile?s labor at $10.00 an hour. surface-to-air missile works approximately 20 hours a week in addition to preparing shipments. We begin by determining variable and repair tolls using the High-Low regularity:ActivityCostHigh Level 6$3300Low look into 4$23002$1000Variable costPer unit $ cholecalciferol ($1000/2)Variable costAt high spirit$3000Total costAt high level$3300 touch on costPer week $300With the above information, we derive the following in a handed-down andContribution leeway income statements: hassle Huffnpuff GlassblowingTraditional Income StatementRevenue$136,000Less cost of goods sold$136,000Gross Profit 0Marketing $6,050Net Income (Loss) ($6,050) waste Huffnpuff GlassblowingContribution Margin Income StatementRevenue$136,000Variable cost$120,000Contribution Margin $16,000Fixed be $22,050Net Income (Loss) ($6,050)Break evening PointTo calculate Harry?s Break regular Point we will intake the following formula: primitive revenue = Variable Expenses + Fixed Expenses + ProfitsSales = $680 per unitVariable Expenses:?$500 per unit?$80 cargo ships?$20.

00 tire out?= $600 issue forth per unitFixed Expenses:?Cost of manufacturing: $300 X 40 weeks = $12,000?Marketing = $6,050?Labor $8000 ($10.00 an hour for 20 hours a week for 40 weeks)?Harry?s wages $34,722 ($25,000 subsequently 28% tax range = 25,000/.72)?= $60,722$680Q = $600Q + $60,722 + $0$80Q = $60,722Q = ~760 unitsRecommendationsHarry can do a myriad of things to demote his situation. The first thing Harry should do is charge the customers for shipping. His products be in demand; therefore it should not be a problem tasking the customers with the shipment fee. The customers already take muckle the product up 100 to cc%, so this is emphatically abuse number one. Secondly he should cut down the... If you insufficiency to get a copious essay, order it on our website: Ordercustompaper.com

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