Contribution Margin Income Statement

The pursuit is a summary of hassle Huffnpuff Glassblowing business. The following assumptions atomic number 18 made to calculate the required monetary statements. It is assumed that evoke works a 40-hour workhebdomad, producing an average of quintet bundles of glass results a workweek for 40 weeks of the year. Total performance for the year is two hundred bundles sold at $680.00 each. apiece bundle comprises $80.00 to commit and takes two hours of surface-to-air missile?s labor at $10.00 an hour. Sam works approximately 20 hours a week in addition to preparing shipments. We begin by determining variable and improve costs using the High-Low method:ActivityCostHigh Level 6$3300Low train 4$23002$1000Variable costPer unit $ viosterol ($1000/2)Variable costAt high aim$3000Total costAt high level$3300 frozen costPer week $300With the above information, we derive the following in a conventional andContribution circumference income statements: devastate Huf fnpuff GlassblowingTraditional Income StatementRevenue$136,000Less cost of goods sold$136,000Gross Profit 0Marketing $6,050Net Income (Loss) ($6,050)Harry Huffnpuff GlassblowingContribution Margin Income StatementRevenue$136,000Variable cost$120,000Contribution Margin $16,000Fixed Costs $22,050Net Income (Loss) ($6,050)Break evening PointTo calculate Harry?s Break Even Point we will enjoyment the following formula:gross revenue = Variable Expenses + Fixed Expenses + ProfitsSales = $680 per unitVariable Expenses:?$500 per unit?$80 cargo ships?$20.

00 turn over?= $600 measure per unitFixed Expenses:?Cost of manufacturing : $300 X 40 weeks = $12,000?Marketing = $6,! 050?Labor $8000 ($10.00 an hour for 20 hours a week for 40 weeks)?Harry?s wages $34,722 ($25,000 after 28% tax site = 25,000/.72)?= $60,722$680Q = $600Q + $60,722 + $0$80Q = $60,722Q = ~760 unitsRecommendationsHarry can do a myriad of things to intermit his situation. The first thing Harry should do is charge the customers for shipping. His products atomic number 18 in demand; therefore it should not be a problem tasking the customers with the shipment fee. The customers already take muckle the product up 100 to 200%, so this is emphatically amount number one. Secondly he should cut down the... If you motive to get a full essay, order it on our website: BestEssayCheap.com

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