accounting-Glass Inc. has the following information for August 2015

QUESTION

Question 1:GlassInc. has the following information for August 2015: Selling price$ 27 per unit Variable expenses$ 18 per unit Fixed expenses$ 8,010 per month Actual Units Sold1,040Required:1. Prepare a Contribution Income Statementwith the data provided.2. Ifthey spend an extra $1,000 a month in advertising, sales will increase by 100units. Prepare a new Contribution Income Statement. Would their operatingincome increase or decrease?3. Ifthey decrease the selling price from $27 to $23, sales volume would increase by50%. Prepare a new Contribution Income Statement. Would their operating incomeincrease or decrease?kkQuestion 2:The Long Term Care Plus Company has two service departments — actuarial and premium rating, and two production departments — marketing and sales. The distribution of each service department’s efforts to the other departments is shown below: The direct operating costs of the departments (including both variable and fixed costs) were as follows: Required:Determine the totalcost allocated to the Marketing and Sales Department using the direct method.

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