King Flute & Instruments is a leading producer of quality instruments based on projection, fuller sounds, and designs. King Flute carries the best flute brands: Pearl Quantz Series Flute, Gemeinhardt 32B Flute, and Yamaha 677H Flute. They have contracts with instrument manufacturers for an average cost of ₱17,270 and then sell them to retail companies for an average price of ₱34,540. During the month, King Flute sold 80 Pearl Quantz Series Flutes. The company’s selling, general, and administrative (SG&A) costs related to the product line are presented below: Selling: Advertising ₱15,000 per month Sales salaries and commissions ₱7,500 per month, plus 12.5% of sales Delivery costs to customers ₱485 per instrument sold Utilities ₱2,000 per month Depreciation of sales facilities ₱800 per month General & Administrative: Staff salaries ₱25,000 per month Insurance ₱2,000 per month Clerical ₱150 per month, plus ₱50 per instrument sold Depreciation of office equipment ₱120 per month Miscellaneous office expense ₱520 per month ₱ is the amount of contribution margin of King Flute & Instruments. ₱ is the amount of total fixed costs of King Flute & Instruments.. ₱ is the amount of net operating income of King Flute & Instruments.. ₱ is the amount of selling expenses of King Flute & Instruments

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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King Flute & Instruments is a leading producer of quality instruments based on projection, fuller sounds, and designs. King Flute carries the best flute brands: Pearl Quantz Series Flute, Gemeinhardt 32B Flute, and Yamaha 677H Flute. They have contracts with instrument manufacturers for an average cost of ₱17,270 and then sell them to retail companies for an average price of ₱34,540. During the month, King Flute sold 80 Pearl Quantz Series Flutes. The company’s selling, general, and administrative (SG&A) costs related to the product line are presented below:

	Selling:
	Advertising	₱15,000 per month
	Sales salaries and commissions	₱7,500 per month, plus 12.5% of sales
	Delivery costs to customers	₱485 per instrument sold
	Utilities	₱2,000 per month
	Depreciation of sales facilities	₱800 per month
	General & Administrative:
	Staff salaries	₱25,000 per month
	Insurance	₱2,000 per month
	Clerical	₱150 per month, plus ₱50 per instrument sold
	Depreciation of office equipment	₱120 per month
	Miscellaneous office expense	₱520 per month

₱____________ is the amount of contribution margin of King Flute & Instruments.

₱____________ is the amount of total fixed costs of King Flute & Instruments..

₱____________ is the amount of net operating income of King Flute & Instruments..

₱____________ is the amount of selling expenses of King Flute & Instruments.

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