Running Head: 9-2 Final Milestone

Running head: 9-2 FINAL MILESTONE 19-2 Final MilestoneSouthern New Hampshire UniversityACC 550 Hampshire Company Case StudySection I: Cost-Volume-Profit AnalysisHampshire Company manufactures umbrellas that sell for $12.50 each. Hampshire company made and sold 60,000 umbrellas in 2014. There were fixed manufacturing costs of $216,000 along with $79,525 of fixed administration costs. The per-unit costs of each umbrella are as follows:Direct Materials: $3.00Direct Labor: $1.50Variable Manufacturing Overhead: $0.40Variable Selling Expenses: $1.101. The attached chart calculates net income. There were 60,000 units sold at 12.50 a unit which equals $750,000 in sales. Each unit had a variable cost of $6.00. When 60,000 units are produced the variable cost times the number of units equals $360,000. Fixed costs are$295,525. $750,000 in sales minus $360,000 in variable costs minus fixed costs of $295,525 result in a net income of $94,475.2. The contribution margin per unit is calculated by taking the selling price (12.50 per unit) minus the variable cost per (6.00 per unit). The selling price - the variable cost - results in a $6.50 contribution margin per unit. The contribution margin per unit (6.50) divided by the selling price per unit (12.50) result in the contribution margin ration of