Stuart manufacturing produces metal picture frames. the company’s

  

Stuart Manufacturing produces metal picture frames. The company’s income statements for the last two years are given below

  

Last Year

This Year

 

Unit sold

50000

70000

 

Sales

800000

1120000

 

Less: Cost of goods   sold

550000

710000

 

Gross margin

250000

410000

 

Less: Operating   expenses

150000

190000

 

Net income

100000

220000

The company has no beginning or ending inventories.

Required:

a. Estimate the company’s total variable cost per unit and its total fixed costs per year. (Remember that this is a manufacturing firm.)

b. Compute the company’s contribution margin for this year.

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