Normal capacity Fixed overhead Variable

Per Quarter 40,000 500,000 50 per unit Units Amounts 10,000 625,000 1,562,500 2,187,500 625,000 1,562,500 187,500 500,000 875,000 Per unit 62.5

Cost of goods sold Beginning inventory Production costs applied Total Less: Ending inventory Gross profit Volume variance Selling and general expense Net income Sales forecast Production Practical capacity Question 1 Variable costs Fixed costs Cost of goods sold Gross profit, first quarter Add: Cost of goods sold Total sales revenue Total units Sales price per unit Sales this quarter Total sales revenue, second quarter Less: Cost of goods sold Gross profit, second quarter

25,000 25,000 50,000

1,250,000 250,000 1,500,000 1,562,500 1,562,500 3,125,000 40,000 78 25,000 1,953,125 1,500,000 453,125

Note: It was assumed that there were 40,000 sales in the 1st quarter Question 2 Sales price per unit Variable cost per unit Contribution margin Sales this quarter Total contribution margin Variable cost per unit Production forecast Total variable costs

78 50 28 25,000 703,125 50 50,000 2,500,000

Question 3 Production cost variance This can't be computed as there is no actual information Question 4 Sales Less: Cost of goods sold Variable Fixed Net income Question 5 Sales Less: Cost of goods sold Variable Contribution Margin Less: Fixed expenses Net income

1,953,125 1,250,000 250,000

1,500,000 453,125

1,953,125 1,250,000 703,125 500,000 203,125