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3-36. CONTRIBUTION MARGIN, GROSS MARGIN, AND MARGIN OF SAFETY. Bella Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating income statement shown here to George Sanchez, a potential investor in the business. Help Mr. Sanchez understand Bella Beauty's cost structure. Required 1. Recast the income statement to emphasize contribution margin. 2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2020. 3. What is the margin of safety (in units) for June 2020? 4. If sales in June were only 9,500 units and Bella Beauty's tax rate is 30%, calculate its net income.

3-36. CONTRIBUTION MARGIN, GROSS MARGIN, AND MARGIN OF SAFETY. Bella Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating income statement shown here to George Sanchez, a potential investor in the business. Help Mr. Sanchez understand Bella Beauty's cost structure. Required 1. Recast the income statement to emphasize contribution margin. 2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2020. 3. What is the margin of safety (in units) for June 2020? 4. If sales in June were only 9,500 units and Bella Beauty's tax rate is 30%, calculate its net income.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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3-36. CONTRIBUTION MARGIN, GROSS MARGIN, AND MARGIN www OF SAFETY. Bella Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating income statement shown here to George Sanchez, a potential investor in the business. Help Mr. Sanchez understand Bella Beauty's cost structure. Required 1. Recast the income statement to emphasize contribution margin. 2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2020. 3. What is the margin of safety (in units) for June 2020? 4. If sales in June were only 9,500 units and Bella Beauty's tax rate is 30%, calculate its net income.
Transcribed Image Text:3-36. CONTRIBUTION MARGIN, GROSS MARGIN, AND MARGIN www OF SAFETY. Bella Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating income statement shown here to George Sanchez, a potential investor in the business. Help Mr. Sanchez understand Bella Beauty's cost structure. Required 1. Recast the income statement to emphasize contribution margin. 2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2020. 3. What is the margin of safety (in units) for June 2020? 4. If sales in June were only 9,500 units and Bella Beauty's tax rate is 30%, calculate its net income.
Home A Insert Page Layout B 1 2 3 Units sold 4 Revenues 5 Cost of goods sold 6 Variable manufacturing costs 7 8 9 Gross margin 10 Operating costs: 11 Fixed manufacturing costs Total cost of goods sold 12 13 14 Operating income Variable marketing costs Fixed marketing & admin. costs Bella Beauty Operating Income Statement June 2020 Formulas Total operating costs Data C $50,000 19,920 $22,000 18,000 Review View D 10,000 $120,000 69,920 50,080 40,000 $ 10,080
Transcribed Image Text:Home A Insert Page Layout B 1 2 3 Units sold 4 Revenues 5 Cost of goods sold 6 Variable manufacturing costs 7 8 9 Gross margin 10 Operating costs: 11 Fixed manufacturing costs Total cost of goods sold 12 13 14 Operating income Variable marketing costs Fixed marketing & admin. costs Bella Beauty Operating Income Statement June 2020 Formulas Total operating costs Data C $50,000 19,920 $22,000 18,000 Review View D 10,000 $120,000 69,920 50,080 40,000 $ 10,080
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