ACC 202 MODULE 3 SLP LATEST-TRIDENT
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ACC 202 Module 3 SLP Latest-Trident
ACC202
ACC 202 Module 3 SLP Latest-Trident
Module 3 – SLP
VARIABLE AND FIXED COSTS
Below find production and sales information for Herrestad
Company. We will use this same company for Module 4.
Product Information
Beginning inventory 0
Units produced $10,000
Units sold $8,000
Selling price per unit $250
Variable costs per unit
Direct material $100
Direct labor $50
Variable overhead $30
Variable selling and administrative $10
Fixed costs
Fixed manufacturing overhead $200,000
Fixed selling and administrative $100,000
Herrestad company
Absorption income statement for the period ending Dec. 31, 2015
Sales $2,000,000
Costs of goods sold $1,600,000
Gross profit (margin) $400,000
Selling and administrative expenses $180,000
Net income $220,000
Required: Prepare a contribution
margin (behavioral, variable) income statement for Herrestad Company, compare
net operating profit from a contribution margin income statement with net
income from an absorption income statement, and explain why this difference
happens. Prepare a second version assuming the selling price per unit increases
to $270 per unit.
Use the original information to:
Compute break-even, assuming direct materials cost increase from
$100 to $130, but all information remains the same.
The submission should be 2 to 4 pages and needs to include
answers to all the questions listed above. Show computations, discuss the
results, and include references in APA format.
SLP Assignment Expectations
It is important to answer the questions above. The discussion
should be two to four pages and written in a clear and concise manner. Support
your discussion with references in APA format. You are encouraged to use Excel
or other compatible spreadsheet when computations are involved.
When your paper is done, upload it to the appropriate dropbox.
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