The Cost Accountant for the Friendly Manufacturing Company Has Provided

question 42

Essay

The cost accountant for the Friendly Manufacturing Company has provided you with the following information for the month of July:
$$\begin{array} { l c c } & & \text { Total Fixed } \\&\text { Variable costs Per unit } & \text { Costs } \\\text { Direct labor } & 27.50 \\\text { Direct materials } &84.75 & \\\text { Manufacturing overhead } & 14.25 & \$ 120,000 \\\text { Marketing costs } &5.30 & 50,000\\\text { Administrative costs } &2.90 & 75,000 \\\text { Selling price } & 210.00\end{array}$$
Required:
Assuming the company produced and sold 5,000 units, and there were no units in inventory on July 1, prepare the following income statements for the month of July:
(a) Contribution margin income statement.
(b) Gross margin income statement.

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Definitions:

Marginal Productivity

The additional output that is produced by adding one more unit of a specific factor of production, while other factors are held constant.

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Units of measurement indicating the time robots are in operation or engaged in productive tasks.

Average Product

The amount of production divided by the input units, indicating the efficiency of production per input unit.

Semiconductor Chip

A small electronic device made of semiconductor material, used in a wide array of electronic circuits and devices for processing or controlling electrical signals.