Question

1.In a contribution format income statement for a merchandising company, the cost of goods sold reports the product costs attached to the merchandise sold during the period.true or false  

2.At an activity level of 8,400 units in a month, Braughton Corporation’s total variable maintenance and repair cost is $697,284 and its total fixed maintenance and repair cost is $464,100. What would be the total maintenance and repair cost, both fixed and variable, at an activity level of 8,500 units in a month? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.)

Answer 1

Solutions:

1.In a contribution format income statement for a merchandising company, the cost of goods sold reports the product costs attached to the merchandise sold during the period.

TRUE  

2.At an activity level of 8,400 units in a month, Braughton Corporation’s total variable maintenance and repair cost is $697,284 and its total fixed maintenance and repair cost is $464,100. What would be the total maintenance and repair cost, both fixed and variable, at an activity level of 8,500 units in a month? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.)

Answer:

$11,69,685.00

Workings:

	Level of Activity
	8400
	Per Unit	Total
Variable Cost (697284/8400)	$83.01	$6,97,284.00
Fixed Cost		$4,64,100.00
Total		$11,61,384.00

	Level of Activity
	8500
	Per Unit	Total
Variable Cost (8500*83.01)	$83.01	$7,05,585.00
Fixed Cost (Remains the same as the level of activuty is within the range)		$4,64,100.00
Total		$11,69,685.00