a. Recast the absorption-based income statement above into a contribution-based income statement.
a. Recast the absorption-based income statement above into a contribution-based income statement.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not give solution in image format thanku
![Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. Here
is her forecasted income statement for April, when she expects to produce and sell 3,000 meals:
Sales revenue
Costs of meals produced
Gross profit...
Administrative costs
Operating profit.
Amount
$18,000
13,500
$ 4,500
2,100
$ 2,400
Per Unit
$6.00
4.50
$1.50
0.70
$0.80
Committed fixed costs included in this income statement are $4,000 for meal production and $600 for
administrative costs.
Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special
Olympics. This organization is willing to pay $3.50 per meal for 300 meals on April 10. Maria does not currently have
sufficient idle capacity to fill this special order. She would need to reduce her normal operations by 100 meals on
that day in order to fulfill the special request.
Required
Recast the absorption-based income statement above into a contribution-based income statement.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fedf111bd-8104-414c-92c2-cbc9edca5ffc%2F482e6bdc-48e2-455e-a06b-e27366da4be7%2Fbfwdkwm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. Here
is her forecasted income statement for April, when she expects to produce and sell 3,000 meals:
Sales revenue
Costs of meals produced
Gross profit...
Administrative costs
Operating profit.
Amount
$18,000
13,500
$ 4,500
2,100
$ 2,400
Per Unit
$6.00
4.50
$1.50
0.70
$0.80
Committed fixed costs included in this income statement are $4,000 for meal production and $600 for
administrative costs.
Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special
Olympics. This organization is willing to pay $3.50 per meal for 300 meals on April 10. Maria does not currently have
sufficient idle capacity to fill this special order. She would need to reduce her normal operations by 100 meals on
that day in order to fulfill the special request.
Required
Recast the absorption-based income statement above into a contribution-based income statement.
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