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Summary Running head: 9-2 FINAL MILESTONE

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Running head: 9-2 FINAL MILESTONE 1 9-2 Final Milestone Southern New Hampshire University ACC 550 Hampshire Company Case Study Section I: Cost-Volume-Profit Analysis Hampshire Company manufactures umbrellas ...

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  • October 17, 2024
  • 15
  • 2024/2025
  • Summary

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  • 000 along with 79
  • running head 9 2 final milestone
  • 000 umbrellas in 2014 there were fixed manufactur
  • 525 of fixed administration costs the per unit co
  • 000 units sold at 1250 a unit which equals 750
  • 00

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Running head: 9-2 FINAL MILESTONE 1




9-2 Final Milestone


Southern New Hampshire University

, ACC 550 Hampshire Company Case Study

Section I: Cost-Volume-Profit Analysis
Hampshire Company manufactures umbrellas that sell for $12.50 each. Hampshire company made and
sold 60,000 umbrellas in 2014. There were fixed manufacturing costs of $216,000 along with $79,525
of fixed administration costs. The per-unit costs of each umbrella are as follows:

Direct Materials: $3.00
Direct Labor: $1.50
Variable Manufacturing Overhead: $0.40
Variable Selling Expenses: $1.10

1. The attached chart calculates net income. There were 60,000 units sold at 12.50 a unit
which equals $750,000 in sales. Each unit had a variable cost of $6.00. When 60,000 units
are produced the variable cost times the number of units equals $360,000. Fixed costs are
$295,525. $750,000 in sales minus $360,000 in variable costs minus fixed costs of
$295,525 result in a net income of $94,475.




2. The contribution margin per unit is calculated by taking the selling price (12.50 per unit) minus
the variable cost per (6.00 per unit). The selling price - the variable cost - results in a $6.50
contribution margin per unit. The contribution margin per unit (6.50) divided by the selling
price per unit (12.50) result in the contribution margin ration of 52%

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