ACCT 505 Week 1 Case Study
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Question 3. Question:( TCO C) 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 Question 4. Question:( TCO D) The Hampton 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 $ 150 Direct labor $ 75 Variable manufacturing overhead $ 25 Variable selling and admin $ 15
Fixed costs: Fixed manufacturing overhead $ 275,000 Fixed selling and admin $ 200,000 ================================================
ACCT 505 Week 1 Case Study
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Top Switch Inc. designs and manufactures switches used in telecommunications. Serious flooding throughout the state of Tennessee affected Top Switch’ s facilities. Inventory was completely ruined, and the company’ s computer system, including all accounting records, was destroyed.