Question

Questlon 32 Martin Footwear Co. produces high-quality shoes. To prepare for next year's marketing campaign, the company's controller has prepared the following information for the current year, 2020: Variable costs (per pair of shoes) Direct materials $41.00 Direct manufacturing labour 20.00 Variable overhead (manufacturing, marketing, distribution, customer service, and administration) 24.00 Total variable costs $85.00 Fixed costs Manufacturing Marketing, distribution, and customer service $2,645,000 525,000 750,000 $3,920,000 Administrative Total fixed costs Selling price per pair of shoes Expected revenues, 2020 (51,500 units) Income tax rate $185 $9,527,500 40%

Answer 1

$ 10,582,000 Working $ $ $ 2,345,200 1,144,000 1,372,800 57200 x 41 57200 x 20 57200 x 24 Less Income Statement Sales Revenue Variable Expenses Direct Material Direct Manufacturing labor Variable Overhaed Total Variable Expense Contribution Margin Fixed Expenses Manufacturing Marketing, distribution and customer service Administrative Total Fixed Expense Operating Income $ $ 4,862,000 5,720,000 $ $ 2,645,000 953,000 750,000 525000 + 428000 Less $ $ 4,348,000 1,372,000