Deadline 18 August.
Below find production and sales information for Lewis Company.
Selling price per unit
Variable costs per unit
Variable selling and administrative
Fixed manufacturing overhead
Fixed selling and administrative
Absorption Income Statement
For the period ending Dec. 31, 2015
Cost of goods sold
Gross profit (margin)
Selling and administrative expenses
Prepare a contribution margin (behavioral, variable) income statement for Lewis 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 $320 per unit.
Further, answer break even questions below. Use the original information to:
Determine the number of units the company must sell to break even for the year?
Compute break even assuming direct materials cost increase from $120 to $150, but all
information remains the same.