Problem 19-8A Dilithium Batteries is a division of Enterprise Corporation. The d

Question

Problem 19-8A Dilithium Batteries is a division of Enterprise Corporation. The division manufactures and sells a long-life battery used in a wide variety of applications. During the coming year, it expects to sell 60,000 units for $34 per unit. Nyota Uthura is the division manager. She is considering producing either 60,000 or 90,000 units during the period. Other information is presented in the schedule Beginning inventory Expected sales in units Selling price per unit Variable manufacturing costs per unit Fixed manufacturing overhead costs (total) Fixed manufacturing overhead costs per unit: 60,000 $34 $15 $540,000 $9 per unit ($540,000 ÷ 60,000) $6 per unit ($540,000 ÷ 90,000) Based on 60,000 units Based on 90,000 units Manufacturing cost per unit: Based on 60,000 units Based on 90,000 units $24 per unit ($15 variable$9 fixed) $21 per unit ($15 variable+$6 fixed) Variable selling and administrative expenses Fixed selling and administrative expenses (total) $4 $50,000

Explanation / Answer

Income statement 60,000 90,000 produced produced Sales 2040000 3060000 less cost of goods sold 1440000 1890000 Gross profit 600000 1170000 variable selling expense 240000 360000 fixed selling & adm expense 50000 50000 net income(loss) 310000 760000 income statement Variable costing 60,000 90,000 produced produced sales 2040000 3060000 less variable cost of goods sold 900000 1350000 variable selling & adm expense 240000 360000 contribution margin 900000 1350000 Fixed manufacturing overhead 540,000 540,000 fixed selling & adm expense 50,000 50,000 Net income (loss) 310,000 760,000

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