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Lorge Corporation has collected the following information afterits first year of sales. Sales were $1,575,000 on 105,000 units;selling expenses $250,000 (40% variable and 60% fixed); directmaterials $606,100; direct labor $250,000; administrative expenses$270,000 (20% variable and 80% fixed); and manufacturing overhead$357,000 (70% variable and 30% fixed). Top management has asked youto do a CVP analysis so that it can make plans for the coming year.It has projected that unit sales will increase by 10% next year.Compute (1) the contribution margin for the current year and theprojected year, and (2) the fixed costs for the current year.(Assume that fixed costs will remain the same in the projectedyear.)

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Bunny Greenfelder
Bunny GreenfelderLv2
28 Sep 2019

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Mozena Corporation has collected the following information afterits first year of sales. Sales were $1,600,000 on 100,000 units;selling expenses $248,400 (40% variable and 60% fixed); directmaterials $513,000; direct labor $363,880; administrative expenses$282,600 (20% variable and 80% fixed); manufacturing overhead$353,200 (70% variable and 30% fixed). Top management has asked youto do a CVP analysis so that it can make plans for the coming year.It has projected that unit sales will increase by 10% nextyear.

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