Calculate each of the following for 2010 if 260,000 units we…
(CVP; DOL; MS—two quarters; comprehensive) Following is information pertaining to Dayton Co.’s operations of the first and second quarter of 2010:
QUARTER
First
Second
Units
Production
70,000
60,000
Sales
60,000
70,000
Expected activity level
65,000
65,000
Unit selling price
$ 75.00
$ 75.00
Unit variable costs
Direct material
$ 34.50
$ 34.50
Direct labor
16.50
16.50
Factory overhead
7.80
7.80
Selling and administrative
5.70
5.70
Fixed costs
Factory overhead
$195,000
$195,000
Selling and administrative
42,800
42,800
Additional Information There were no finished goods at January 1, 2010. Dayton Co. writes off any quarterly underapplied or overapplied overhead as an adjustment to Cost of Goods Sold. Dayton Co.’s income tax rate is 35 percent.
a. Prepare a variable costing income statement for each quarter.
b. Calculate each of the following for 2010 if 260,000 units were produced and sold:
1. Unit contribution margin.
2. Contribution margin ratio.
3. Total contribution margin.
4. Net income.
5. Degree of operating leverage.
6. Annual break-even unit sales volume.
7. Annual break-even dollar sales volume.
8. Annual margin of safety as a percentage.
9. Annual margin of safety in units.
