Required information The following information applies to th

Required information [The following information applies to the questions displayed below.] Oak Mart, a producer of solid oak tables, reports the following data from its second year of business 310 per unit Sales price per unit Units produced this year Units sold this year Units in beginning-year inventory Beginning inventory costs 120,000 units 123,750 units 3,750 units Variable (3,750 units x $140) Fixed (3,750 units x $70) Total $ 525,000 262,500 $ 787,500 Manufacturing costs this year Direct materials Direct labor Overhead costs this year 48 per unit 68 per unit Variable overhead Fixed overhead $3,600,000 $7,200,000 Selling and administrative costs this year Variable Fixed $1,450,000 4,200,000

Solution

Oak Mart Company Variable Costing Income Statement Sales (123,750 units X $310) $       3,83,62,500 Less: Variable Cost Beginning Inventory (3,750 units X $140) $       5,25,000 Add: Manufacturing Cost this year Direct Material (120,000 units X $48) $     57,60,000 Direct Labour (120,000 units X $68) $     81,60,000 Variable Overhead $     36,00,000 Total Variable Production Cost $ 1,75,20,000 Total Variable Cost Available $ 1,80,45,000 Less: Ending Inventory $0 Variable Production Cost of Goods sold $ 1,80,45,000 Variable Selling and Administrative Expenses $     14,50,000 Total Variable Cost $       1,94,95,000 Contribution Margin $       1,88,67,500 Less: Fixed Expenses Fixed Selling and Administrative Expenses $     42,00,000 Fixed Manufacturing Overhead $     72,00,000 Total Fixed Costs $       1,14,00,000 Net Income (loss) $           74,67,500