Taveras Industries Developed the Following Information for the Product It

question 39

Essay

Taveras Industries developed the following information for the product it sells: $\begin{array}{ll}\text { Sales price } & \$ 50 \text { per unit } \\\text { Variable cost of goods sold } & \$ 28 \text { per unit } \\\text { Fixed cost of goods sold } & \$ 650,000 \\\text { Variable selling expense } & 10 \% \text { of sales price } \\\text { Variable administrative expense } & \$ 2.00 \text { per unit } \\\text { Fixed selling expense } & \$ 400,000 \\\text { Fixed administrative expense } & \$ 300,000\end{array}$ For the year ended December 31 2016 Taveras produced and sold 100000 units of product.
Instructions
(a) Prepare a CVP income statement using the contribution margin format for Taveras Industries for 2016.
(b) What was the company's break-even point in units in 2016? Use the contribution margin technique.
(c) What was the company's margin of safety in dollars in 2016?

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Definitions:

Health Care Costs

The expenses associated with medical services, treatments, and drugs required to maintain an individual's health.

Productivity Growth

An increase in the efficiency of production processes, leading to a higher output of goods and services for the same input of labor and capital.

Information Workers

refer to individuals whose main job function involves producing, processing, or distributing information, often using technology.

Nation of Immigrants

Refers to the concept that a country is largely made up of immigrants and their descendants, emphasizing the diversity and multicultural aspects of its population.