E Contribution Income Statement and CostVolumeProfit Graph
Picnic Time produces a picnic basket that is sold for $ per unit. Assume the company produced and sold baskets during July. There were no beginning or ending inventories. Variable and fixed costs follow.
Variable Costs per Unit
Manufacturing:
Direct materials: $
Direct labor: $
Manufacturing overhead: $
Selling and administrative: $
Total: $
Fixed Costs per Month
Manufacturing overhead: $
Selling and administrative: $
Total: $
Required:
a Prepare a contribution income statement for July.
b Prepare a costvolumeprofit graph. Label the horizontal axis in units with a maximum value of Label the vertical axis in dollars with a maximum value of $ Draw a vertical line on the graph for the current unit sales level, and label total variable costs, total fixed costs, and total profits at units.
