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4 June, 08:37

arcker Manufacturing's cost accountant has provided you with the following information for January operations. Direct materials$21per unit Fixed manufacturing overhead costs$135,000 Sales price$79per unit Variable manufacturing overhead$12per unit Direct labor$24per unit Fixed marketing and administrative costs$117,000 Units produced and sold 30,000 Variable marketing and administrative costs$5per unit Required: a. Prepare a gross margin income statement. b. Prepare a contribution margin income statement.

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  1. 4 June, 09:02
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    A) Larcker Manufacturing Gross Margin Income Statement

    $ $

    Sales 2,370,000

    Less: Cost of goods sold

    Direct materials 630,000

    Direct labor 720,000

    Manufacturing overhead (fixed + variable) 495,000

    Total COGS (1,845,000)

    Gross profit 525,000

    Operating Expenses

    Marketing and administrative costs (267,000)

    Net profit 258,000

    B) Larcker Manufacturing Contribution Margin Income Statement

    $ $

    Sales 2,370,000

    Variable Production Expenses

    Direct materials 630,000

    Direct labor 720,000

    Variable manufacturing overhead 360,000

    Total variable production expenses (1,710,000)

    Gross contribution margin 660,000

    Variable marketing and administrative cost (150,000)

    Contribution margin 510,000

    Fixed manufacturing overhead 135,000

    Fixed marketing and administrative costs 117,000

    Total fixed expenses (252,000)

    Net Profit 258,000
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