A company sells small motors as a component part to automobiles. The Model 101 motor sells for $830 and has per-unit variable costs of $332 associated with its production. The company has fixed expenses of $80,000 per month. In August, the company sold 430 of the Model 101 motors. Question Content Area A. Calculate the contribution margin per unit for the Model 101. Contribution margin $fill in the blank ___________ per unit B. Calculate the contribution margin ratio of the Model 101. Contribution margin ratio fill in the blank ______________ % C. Prepare a contribution margin income statement for the month of August. Use a minus sign for a net loss if present. Income Statement $Sales Variable Costs $Contribution Margin Fixed Costs $Net Income (Loss)
A company sells small motors as a component part to automobiles. The Model 101 motor sells for $830 and has per-unit variable costs of $332 associated with its production. The company has fixed expenses of $80,000 per month. In August, the company sold 430 of the Model 101 motors.
Question Content Area
A. Calculate the contribution margin per unit for the Model 101.
Contribution margin $fill in the blank ___________ per unit
B. Calculate the contribution margin ratio of the Model 101.
Contribution margin ratio fill in the blank ______________ %
C. Prepare a contribution margin income statement for the month of August. Use a minus sign for a net loss if present.
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$Sales |
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Variable Costs |
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$Contribution Margin |
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Fixed Costs |
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$Net Income (Loss) |
The income statement is one of the most important parts of financial reports produced by an entity. The income statement is prepared after the accounting period to show the result of the operation If the income statement indicates profit that means operations are profitable.
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