Question

Martram Corporation has completed the development of a new line of wrist bracelets. Sales are expected to be 30,000 units in year one and 50,000 in year two. Prepare a two-year operating statement. Prepared variable contribution, and breakeven volume analysis.

Retail Selling Price                              $30

Retail Margin                                      50%

Material cost/unit                                 $3.75

Labour cost/unit                                  $1.25

Packaging cost/unit                             $0.50

Salesforce salaries and expenses         $150,000

Manufacturing overhead                     $ 76,000

Administrative expenses                     $ 70,000

Sales Promotion (year one only)         $ 40,000

Answer 1

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Please find below the answer
Statementshowing Computations
Paticulars	30,000 Units	50,000 Units
Sales	900,000.00	1,500,000.00
Less Variable costs:
Material costs	112,500.00	187,500.00
Labour costs	37,500.00	62,500.00
Packaging costs	15,000.00	25,000.00
Total variable costs	165,000.00	275,000.00
Contribution margin = Sales- VC	735,000.00	1,225,000.00
Less Fixed costs:
Salesforce salaries and expenses	150,000.00	150,000.00
Manufacturing overhead	76,000.00	76,000.00
Administrative expenses	70,000.00	70,000.00
Sales Promotion	40,000.00	-
Total Fixed costs	336,000.00	296,000.00
Income	399,000.00	929,000.00
CM Ratio = CM /Sales	81.67%	81.67%
Break even sales = FC/CM Ratio	411,428.57	362,448.98