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American Public University Operations And Supply Chain Management Assignment Help - Company sells


Question - Suppose that Adams Company sells a product for $20. Unit costs are as follows:
Direct materials $3.90
Direct labor 1.40
Variable factory overhead 2.10
Variable selling and administrative expense 1.60
Total fixed factory overhead is $52,000 per year, and total fixed selling and administrative
expense is $38,530.
Required:
1. Calculate the variable cost per unit and the contribution margin per unit.
2. Calculate the contribution margin ratio and the variable cost ratio.
3. Calculate the break-even units.
4. Prepare a contribution margin income statement at the break-even number of units.

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