Question

Larcker Manufacturing's cost accountant has provided you with the following information for January operations. Direct materials $ 34 per unit Fixed manufacturing overhead costs $ 230,000 Sales price $ 190 per unit Variable manufacturing overhead $ 18 per unit Direct labor $ 30 per unit Fixed marketing and administrative costs $ 205,000 Units produced and sold $ 6,000 Variable marketing and administrative costs $ 8 per unit Required: a. Prepare a gross margin income statement. b. Prepare a contribution margin income statement.

Answer 1

Please see details below

Step-by-step explanation:

Gross Margin income statement

Sales $ 1.140.000

Direct Labor -$ 180.000

Direct Materials -$ 204.000

Variable Manuf. Overhead -$ 204.000

Gross Profit $ 552.000

Manufacturing Overhead -$ 230.000

Fixed Mktg Costs -$ 205.000

Operating Expenses -$ 35.000

Variable Mktg Cost -$ 48.000

Net Income $ 34.000

Contribution Margin Inc. statement.

Sales $ 1.140.000

Direct Labor -$ 180.000

Direct Materials -$ 204.000

Variable Manuf. Overhead -$ 204.000

Gross Contribution Margin $ 552.000

Variable Mktg Cost -$ 48.000

Fixed Mktg Costs -$ 205.000

Operating Expenses -$ 35.000

Contribution Margin $ 264.000

Manufacturing Overhead -$ 230.000

Net Income $ 34.000