Managerial Accounting - Question 1

Use excel or word only. Provide all supporting calculations to show how you arrived at your numbers

Part A: Fixed and Variable Cost

Stuart Manufacturing produce metals pictures frames. The Company’s income statement for the last two years are given below

	Last Year	This Year
Units Sold	50,000	70,000
Sales	$80,000	$1,120,000
Cost of Goods Sold	550,000	710,000
Gross Margin	250,000	410,000
Selling and administrative expense	150,000	190,000
Net Operating Income	$100,000	$220,000

The company has no beginning or ending inventories.

Required:

a. Estimate the company's total variable cost per unit and its total fixed costs per year. (Remember that this is a manufacturing firm.)

b. Compute the company's contribution margin for this year.