Contribution Margin Income Statement

The pursuit is a summary of hassle Huffnpuff Glassblowing business. The following assumptions nuclear number 18 made to calculate the required financial statements. It is assumed that blight works a 40-hour workhebdomad, producing an average of tail fin bundles of glass merchandises a workweek for 40 weeks of the year. Total occupation for the year is two hundred bundles sold at $680.00 each. for each one 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 acting:ActivityCostHigh Level 6$3300Low train 4$23002$1000Variable costPer unit $ five hundred ($1000/2)Variable costAt high aim$3000Total costAt high level$3300 flash-frozen costPer week $300With the above information, we derive the following in a traditional andContribution allowance account inc ome statements: vex Huffnpuff 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 exercise the following formula:gross revenue = Variable Expenses + Fixed Expenses + ProfitsSales = $680 per unitVariable Expenses:?$500 per unit?$80 cargo ships?$20.

00 projection?= $600 add together per unitFixed Expenses:?Cost of manufacturing: $300 X 40 weeks = $ 12,000?Marketing = $6,050?Labor $8000 ($10.0! 0 an hour for 20 hours a week for 40 weeks)?Harry?s wages $34,722 ($25,000 after 28% tax pace = 25,000/.72)?= $60,722$680Q = $600Q + $60,722 + $0$80Q = $60,722Q = ~760 unitsRecommendationsHarry can do a myriad of things to get around his situation. The first thing Harry should do is charge the customers for shipping. His products are 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 criterion number one. Secondly he should cut down the... If you requisite to get a full essay, order it on our website: OrderEssay.net

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