1. Shown below is an income statement in the traditional format for Ellie Inc, which has a contribution margin ratio of 25%. Sales ........ Cost of goods sold.... Gross profit...... Operating expenses: Selling...... Administrative... Operating income ***** ******* $100,000 (70,000) $ 30,000 (5,000) (10,000) $ 15,000 a. Prepare an income statement in the contribution margin format. b. Calculate the sales per unit, variable expense per unit, and contribution margin per unit if 10,000 units were produced and sold. c. Calculate the cost formula (Y=a+bX). d. Calculate the firm's break even point in units.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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1. Shown below is an income statement in the traditional format
for Ellie Inc, which has a contribution margin ratio of 25%.
Sales ......
Cost of goods sold...
Gross profit......
Operating expenses:
Selling...
Administrative....
Operating income
$100,000
(70,000)
$ 30,000
(5,000)
(10,000)
$ 15,000
Prepare an income statement in the contribution margin
format.
b. Calculate the sales per unit, variable expense per unit, and
contribution margin per unit if 10,000 units were produced
and sold.
c. Calculate the cost formula (Y=a+bX).
d. Calculate the firm's break even point in units.
Transcribed Image Text:1. Shown below is an income statement in the traditional format for Ellie Inc, which has a contribution margin ratio of 25%. Sales ...... Cost of goods sold... Gross profit...... Operating expenses: Selling... Administrative.... Operating income $100,000 (70,000) $ 30,000 (5,000) (10,000) $ 15,000 Prepare an income statement in the contribution margin format. b. Calculate the sales per unit, variable expense per unit, and contribution margin per unit if 10,000 units were produced and sold. c. Calculate the cost formula (Y=a+bX). d. Calculate the firm's break even point in units.
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