A-6 Course Content / Chapter 16 Chapter 16 HomeworkANDERSON COMPANYContribution Income StatementFor Month of OctoberSalesLess variable costsDirect materialsDirect laborVariable factory overheadSelling and administrativeContribution marginLess fixed costsFactory overheadSelling and administrativeNet income (loss)(15,600 units x $75)✓(15,600 units x $10) $156,000156,000(15,600 units x $10)(15,600 units x $4)62,40031,200 (405,600)(15,600 units x $2)(15,600 units x $49)764,400$0RequiredDetermine the effect of each of the following independent situations on monthly profit.Note: Do not use negative signs with your answers.$1,170,000468,000312,000a. Purchasing automated assembly equipment, which should reduce direct labor costs by $4 per unit and increase variable overhead costs by $1 per unit and fixed factory overhead by $15,600 per month.Increase of ✔ $ 16,200 Xb. Reducing the selling price by $5 per unit. This should increase the monthly sales by 3,900 units. At this higher volume, additional equipment and salaried personnel would be required. This will increase fixed factory overhead by $5,200 per month and fixed selling andadministrative costs by $2,340 per month.Increase ofX(780,000)$(15,600)Xe. Combining alternatives (a) and (d).Decrease of$0c. Buying rather than manufacturing a component of Anderson's final product. This will increase direct materials costs by $5 per unit. However, direct labor will decline $3 per unit, variable factory overhead will decline $1 per unit, and fixed factory overhead will decline $32,500per month.Increase of ◆ ✔ $500XChapter 16 Homeworkd. Increasing the unit selling price by $5 per unit. This action should result in a 2,600 unit decrease in monthly sales.Decrease of$0X

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ANDERSON COMPANY Contribution Income Statement For Month of October Sales Less variable costs Direct materials Direct labor Variable factory overhead Selling and administrative Contribution margin Less fixed costs Factory overhead Selling and administrative Net Income (loss) (15,600 units x $75) (15,600 units x $10) $156,000 (15,600 units x $10) 156,000 62,400 (15,600 units x $4) (15,600 units x $2) (15,600 units x $49) 31,200 468,000 312,000 $1,170,000 (405,600) 764,400 (780,000) $(15,600) Required Determine the effect of each of the following independent situations on monthly profit. Note: Do not use negative signs with your answers.

ANDERSON COMPANY Contribution Income Statement For Month of October Sales Less variable costs Direct materials Direct labor Variable factory overhead Selling and administrative Contribution margin Less fixed costs Factory overhead Selling and administrative Net Income (loss) (15,600 units x $75) (15,600 units x $10) $156,000 (15,600 units x $10) 156,000 62,400 (15,600 units x $4) (15,600 units x $2) (15,600 units x $49) 31,200 468,000 312,000 $1,170,000 (405,600) 764,400 (780,000) $(15,600) Required Determine the effect of each of the following independent situations on monthly profit. Note: Do not use negative signs with your answers.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.2E: Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each...

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