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##### Herrestad Company ABSORPTION, VARIABLE COSTING and BEP

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Question;Below find production and sales information for;Herrestad Company. We will use this same company for the remaining SLPs.;Product;information;Beginning;inventory 0;Units;produced 10,000;Units;sold 8,000;Selling;price per unit \$250;Variable;costs per unit;Direct;material 100;Direct;labor 50;Variable;overhead 30;Variable;selling and administrative 10;Fixed costs;Fixed;manufacturing overhead 200,000;Fixed;selling and administrative 100,000;Herrestad;Company;Absorption;Income Statement;For;the period ending Dec. 31, 2011Required;Prepare a contribution margin (behavioral, variable);income statement for Herrestad 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 \$270 per unit.;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 \$100 to \$130, but all information remains the same.

Paper#37546 | Written in 18-Jul-2015

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