Taveras Industries developed the following information for the product it sells: Sales price $ 50 per unit Variable cost of goods sold $ 28 per unit Fixed cost of goods sold $ 650 , 000 Variable selling expense 10 % of sales price Variable administrative expense $ 2.00 per unit Fixed selling expense $ 400 , 000 Fixed administrative expense $ 300 , 000 \begin{array}{ll} ext { Sales price } & \$ 50 ext { per unit } \ ext { Variable cost of goods sold } & \$ 28 ext { per unit } \ ext { Fixed cost of goods sold } & \$ 650,000 \ ext { Variable selling expense } & 10 \% ext { of sales price } \ ext { Variable administrative expense } & \$ 2.00 ext { per unit } \ ext { Fixed selling expense } & \$ 400,000 \ ext { Fixed administrative expense } & \$ 300,000\end{array} Sales price Variable cost of goods sold Fixed cost of goods sold Variable selling expense Variable administrative expense Fixed selling expense Fixed administrative expense $50 per unit $28 per unit $650 , 000 10% of sales price $2.00 per unit $400 , 000 $300 , 000 For the year ended December 31 2016 Taveras produced and sold 100000 units of product.Instructions(a) Prepare a CVP income statement using the contribution margin format for Taveras Industries for 2016.(b) What was the company's break-even point in units in 2016? Use the contribution margin technique.(c) What was the company's margin of safety in dollars in 2016?

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Taveras Industries developed the following information for the product it sells:    Sales price  $ 50  per unit   Variable cost of goods sold  $ 28  per unit   Fixed cost of goods sold  $ 650 , 000  Variable selling expense  10 %  of sales price   Variable administrative expense  $ 2.00  per unit   Fixed selling expense  $ 400 , 000  Fixed administrative expense  $ 300 , 000 \begin{array}{ll}	ext { Sales price }  &  \$ 50 	ext { per unit } \	ext { Variable cost of goods sold }  &  \$ 28 	ext { per unit } \	ext { Fixed cost of goods sold }  &  \$ 650,000 \	ext { Variable selling expense }  &  10 \% 	ext { of sales price } \	ext { Variable administrative expense }  &  \$ 2.00 	ext { per unit } \	ext { Fixed selling expense }  &  \$ 400,000 \	ext { Fixed administrative expense }  &  \$ 300,000\end{array}  Sales price   Variable cost of goods sold   Fixed cost of goods sold   Variable selling expense   Variable administrative expense   Fixed selling expense   Fixed administrative expense  ​ $50  per unit  $28  per unit  $650 , 000 10%  of sales price  $2.00  per unit  $400 , 000 $300 , 000 ​   For the year ended December 31 2016 Taveras produced and sold 100000 units of product.Instructions(a) Prepare a CVP income statement using the contribution margin format for Taveras Industries for 2016.(b) What was the company's break-even point in units in 2016? Use the contribution margin technique.(c) What was the company's margin of safety in dollars in 2016?

Arjun Issar · Accepted Answer

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