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  • Solution Assuming Direct Labor Is A Variable Cost: Case 13-30 (Continued)

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    Dahra Sushmita Uy Limbo
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    This document summarizes the contribution margin and net operating income from different production options assuming direct labor is a variable cost. It shows that the company has 2,000 total hours available for welding. Producing 5,000 WVD drums would use all available hours and generate a contribution margin of $456,000. Buying 1,000 additional drums would increase contribution margin and net operating income by $10,250 without requiring additional welding hours.

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    ACTMANA13.4

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    This document summarizes the contribution margin and net operating income from different production options assuming direct labor is a variable cost. It shows that the company has 2,000 total hours available for welding. Producing 5,000 WVD drums would use all available hours and generate a contribution margin of $456,000. Buying 1,000 additional drums would increase contribution margin and net operating income by $10,250 without requiring additional welding hours.

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    63 visualizações1 página

    Solution Assuming Direct Labor Is A Variable Cost: Case 13-30 (Continued)

    Enviado por

    Dahra Sushmita Uy Limbo
    This document summarizes the contribution margin and net operating income from different production options assuming direct labor is a variable cost. It shows that the company has 2,000 total hours available for welding. Producing 5,000 WVD drums would use all available hours and generate a contribution margin of $456,000. Buying 1,000 additional drums would increase contribution margin and net operating income by $10,250 without requiring additional welding hours.

    Direitos autorais:

    Attribution Non-Commercial (BY-NC)
    Baixe no formato PDF, TXT ou leia online no Scribd
    Sinalizar o conteúdo como inadequado
    de 1

    Case 13-30 (continued)

    Solution assuming direct labor is a variable cost


    (a)
    (b)
    Unit
    Contribution
    Quantity Margin
    Total hours available...................
    WVD Drumsmake ....................
    5,000
    $91.20
    Bike frames produced .................
    0
    $107.60
    WVD Drumsbuy.......................
    1,000
    $10.25
    Total contribution margin ............
    Less: Contribution margin from
    present operations: 5,000
    drums $91.20 CM per drum...
    Increased contribution margin
    and net operating income .........

    (c)

    (a) (c)

    Welding
    Time
    per Unit

    Total
    Welding
    Time

    0.4
    0.5

    2,000
    0

    (a) (b)
    Balance
    of
    Welding
    Time
    2,000
    0
    0

    Total
    Contribution
    $456,000
    0
    10,250
    466,250

    456,000
    $ 10,250

    The McGraw-Hill Companies, Inc., 2010. All rights reserved.


    Solutions Manual, Chapter 13

    783

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