Cost per Case

Standard Commercial
Direct Matl 14 16
Direct Labor 8 8
Var. Mfg OH 2 4
Fixed Mfg OH 8 10
Total Mfg cost 32 38
Var. S&A Cost 8 14

No. 1.
Standard Commercial
(A) DM 14 16
DL 8 8
Var. Mfg OH 2 4
Variable Mfg Cost 24 28

(B) Standard Commercial

Direct Matl 14 16
Direct Labor 8 8
Var. Mfg OH 2 4
Fixed Mfg OH 8 10
Total Mfg cost 32 38
(Absorption Cost)

(C ) Standard Commercial
Direct Matl 14 16
Direct Labor 8 8
Var. Mfg OH 2 4
Fixed Mfg OH 8 10
Var. S&A Cost 8 14
Total Cost 40 52

(D) Standard Commercial

Direct Matl 14 16
Direct Labor 8 8
Var. Mfg OH 2 4
Var. S&A Cost 8 14
Total Var. Cost 32 42
 Cost per Case
Standard Commercial
Direct Matl 14 16
Direct Labor 8 8
Var. Mfg OH 2 4
Fixed Mfg OH 8 10
Total Mfg cost 32 38
Var. S&A Cost 8 14
40 52
Standard Commercial
Selling Price 46.00 70.00
Volume 50,000.00 35,000.00

Projected Operating Income (50,000 @ $46/unit)

Standard*
Sales Revenue (50,000 x $46) 2,300,000.00
Less: Var Cost
Direct Matl 700,000.00
Direct Labor 400,000.00
Var. Mfg OH 100,000.00
Var. S&A Cost 400,000.00
Total Var. Cost 1,600,000.00
Contribution Margin 700,000.00
Less: Fixed Cost
Mfg OH 400,000.00
Admin Cost 6,000.00
Total Fixed Cost 406,000.00
Operating Income 294,000.00

Mark Up % on Total Cost 0.15 0.34

Price 45.88 69.88
Total Cost
Mark Up
Based from Forecasted Operating Results (1st
6mos) Standard Commercial
Volume 4,000.00 6,000.00
Fixed Admin Cost 0.12 0.12
Fixed Admin Cost 480.00 720.00

Projected Operating Income (35,000 @ $70/unit)

Commercial*
Sales Revenue (35,000 x $70) 2,450,000.00
Less: Var Cost
Direct Matl 560,000.00
Direct Labor 280,000.00
Var. Mfg OH 140,000.00
Var. S&A Cost 490,000.00
Total Var. Cost 1,470,000.00
Contribution Margin 980,000.00
Less: Fixed Cost
Mfg OH 350,000.00
Admin Cost 4,200.00
Total Fixed Cost 354,200.00
Operating Income 625,800.00