Sales volume (units) Revenue Variable costs Direct materials Direct labor Contribution margin Fixed costs Profit 400 $60,000 600 $60,000 $25,000 $15,000 1,000 $120,000 $40,000 $10,000 $15,000 $25,000 $25,000 $30,000 $55,000 $50,000 $5,000 Use direct labor dollars as the cost driver.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question
Sales
volume
(units)
Revenue
Variable
costs
Direct
materials
Direct
labor
Contribution
margin
Fixed
costs
Profit
Product A
400
$60,000
Product B
600
$60,000
$25,000 $15,000
$10,000 $15,000
Total
1,000
$120,000
$40,000
$25,000
$25,000 $30,000 $55,000
$50,000
$5,000
Use direct labor dollars as the cost driver.
Compute allocated fixed costs for Product A:
Transcribed Image Text:Sales volume (units) Revenue Variable costs Direct materials Direct labor Contribution margin Fixed costs Profit Product A 400 $60,000 Product B 600 $60,000 $25,000 $15,000 $10,000 $15,000 Total 1,000 $120,000 $40,000 $25,000 $25,000 $30,000 $55,000 $50,000 $5,000 Use direct labor dollars as the cost driver. Compute allocated fixed costs for Product A:
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