The STC Supply manufactures memory cards that sell to wholesalers for $4.00 each. Variable and...
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Accounting
The STC Supply manufactures memory cards that sell to wholesalers for $4.00 each. Variable and fixed costs are as follows: Variable Costs per card: Fixed Costs per Month: Manufacturing Direct materials $0.60 Direct labor 0.50 Factory overhead 0.50 $1.60 Factory overhead $14,000 Selling and admin. 0.30 Selling and admin. 6,000 Total $1.90 Total $20,000 STC Supply produced and sold 20,000 cards during October 2014. There were no beginning or ending inventories. Required: a. Prepare a contribution income statement for the month of October. b. Determine STC Supplys monthly break-even point in units. c. Determine the effect on monthly profit of a 1,000 unit increase in monthly sales. d. If STC Supply is subject to an income tax of 40 percent, determine the dollar sales volume required to earn a monthly after-tax profit of $30,000.
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