Question

Problem 1

Haram Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $182.10 per unit.

                                                                                             Year 1                      Year 2                     Year 3

Sales volume (units)                                                   60,000                   80,000               110,000

Sales                                                                               $2,100,000         $2,800,000         $3,850,000

Expenses:

Cost of Goods Sold                                                    (840,000)          (1,120,000)        (1,540,000)

Salaries                                                                            (520,000)              (680,000)            (920,000)

Rent                                                                                   (  50,000)                (  50,000)           (  50,000)

Income Taxes                                                               (   70,560)             (  94,080)          (129,860)

Selling and Administrative                                   (504,800)               (656,400)           (883,800)

Net Operating Income                                            $164,640               $199,520           $326,340

Required A: Compute the Cost/Unit for Cost of Goods Sold, Salaries, Rent and Selling and Administrative Expenses for Years 1-3.

                                                                                             Year 1                      Year 2                     Year 3                                                           

Cost of Goods Sold                                                                                                                                                                                  

Salaries                                                                                                                                                                                                           

Rent                                                                                                                                                                                                                                  

Selling and Administrative                                                                                                                                              

Answer 1

cost of goods sold per unit= cost of good= cost of goods sold/sales volume*100

salaries per unit= salaries/sales volume *100

rent per unit=rent/sales volume*100

selling and administration per unit= selling and admin expense/sales volume*100

for example for 1 year

cost of goods sold per unit= 840000/60000*100=14.00