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

...view middle of the document...

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


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


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


------- 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.


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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