Fixed costs : Fixed manufacturing overhead $ 275,000 Fixed selling and admin $ 200,000 ================================================== 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 .