Posted: July 17th, 2016

What were the fixed selling and administrative expenses for July?

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5. Straight-line depreciation on desks in the office of an attorney.
6. Advertising costs, a lump sum, planned by ABC, Inc.
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9 Compensation of lawyers employed internally by Microsoft.
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Beverly High Fashions Company manufactured and sold 1,000 pair of leather handbags during July. Selected data for this month follow:
Sales $110,000
Direct materials used 31,000
Direct labor 16,000
Variable manufacturing overhead 13,000
Fixed manufacturing overhead 11,000
Variable selling and administrative expenses ?
Fixed selling and administrative expenses ?
Contribution margin 40,000
Operating income 22,000
There were no beginning or ending inventories.

1. What were the variable selling and administrative expenses for July?

2. What were the fixed selling and administrative expenses for July?

3. What was the cost of goods sold during July?

4. Without prejudice to your earlier answers, assume that the fixed selling and administrative expenses for July amounted to $4,000.
a. What was the break-even point in units for July?
b. How many units must be sold to earn a target operating income of $14,000?
c. What would the selling price per unit have to be if the company wanted to earn an operating income of $22,500 on the sale of 900 units?

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