# Management Accounting Essay

1365 words - 6 pages

Prepared by

Md. Mojaddid Ebna Amin

ID : 101-11-1426

Section : C

Program : BBA

Daffodil International University

Exercise 6-12:

Miller Company’s most recent contribution format income statement is shown below:

Total Per Unit

Sales (20000 units) \$300,000 \$15.00

Variable expenses 180,000 9.00

Income Statement

(Contribution Approach) Amount

Sales { 20000+(20000×25%)} × (\$15-1.50) \$337500

(-) Variable Expenses (25000×\$9) 225000

Contribution Margin 112500

(-) Fixed Expenses 70000

Net operating income 42500

[pic]

3. Income Statement

(Contribution Approach) Amount

Sales { 20000-(20000×5%)} × (\$15+1.50) \$313500

(-) Variable Expenses (19000×\$9) 171000

Contribution Margin 142500

(-) Fixed Expenses (\$70000+\$20000) 90000

Net operating income 52500

[pic]

4. Income Statement

(Contribution Approach) Amount

Sales { 20000-(20000×10%)} × (\$15+15×12%) \$302400

(-) Variable Expenses {18000×(\$9+0.6) 172800

Contribution Margin 129600

(-) Fixed Expenses 70000

Net operating income 59600

[pic]

------- o -------

Exercise 6-14:

Lindon Company is the exclusive distributor for an automotive product that sells for \$40 per unit and has a CM ratio of 30%. The company’s fixed expenses are \$180,000 per year.

Required:

1. What are the variable expenses per unit?

2. Using the equation method:

a. What is the break-even paint in units and sales dollars?

b. What sales level in units and sales dollars is required to earn an annual profit of \$60000?

c. Assume that by using a more efficient shipper the company is able to reduce its...

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