Contribution Margin Review the contribution margin income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statements. Complete the following table from the data provided on the income statements. Each company sold 80,800 units during the year. Cover-to-Cover Company Biblio Files Company Contribution margin ratio (percent) fill in the blank 5d4936053f95060_1% fill in the blank 5d4936053f95060_2% Unit contribution margin $fill in the blank 5d4936053f95060_3 $fill in the blank 5d4936053f95060_4 Break-even sales (units) fill in the blank 5d4936053f95060_5 fill in the blank 5d4936053f95060_6 Break-even sales (dollars) $fill in the blank 5d4936053f95060_7 $fill in the blank 5d4936053f95060_8 Question Content Area Income Statement - Cover-to-Cover Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8 Sales $404,000 Variable costs: Manufacturing expense $242,400 Selling expense 20,200 Administrative expense 60,600 (323,200) Contribution margin $80,800 Fixed costs: Manufacturing expense $5,000 Selling expense 4,000 Administrative expense 11,200 (20,200) Operating income $60,600 Income Statement - Biblio Files Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8 Sales $404,000 Variable costs: Manufacturing expense $161,600 Selling expense 16,160 Administrative expense 64,640 (242,400) Contribution margin $161,600 Fixed costs: Manufacturing expense $83,000 Selling expense 8,000 Administrative expense 10,000 (101,000) Operating income $60,600

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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Question Content Area

Income Statement - Cover-to-Cover

Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8
Sales		$404,000
Variable costs:
Manufacturing expense	$242,400
Selling expense	20,200
Administrative expense	60,600	(323,200)
Contribution margin		$80,800
Fixed costs:
Manufacturing expense	$5,000
Selling expense	4,000
Administrative expense	11,200	(20,200)
Operating income		$60,600

Income Statement - Biblio Files

Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8
Sales		$404,000
Variable costs:
Manufacturing expense	$161,600
Selling expense	16,160
Administrative expense	64,640	(242,400)
Contribution margin		$161,600
Fixed costs:
Manufacturing expense	$83,000
Selling expense	8,000
Administrative expense	10,000	(101,000)
Operating income		$60,600

Sales Mix

Biblio Files Company is making plans for its next fiscal year, and decides to sell two new types of bookshelves, Basic and Deluxe. The company has compiled the following estimates for the new product offerings.

Type of Bookshelf	Sales Price per Unit	Variable Cost per Unit
Basic	$5.00	$1.75
Deluxe	9.00	8.10

The company is interested in determining how many of each type of bookshelf would have to be sold in order to break even. If we think of the Basic and Deluxe products as components of one overall enterprise product called “Combined,” the unit contribution margin for the Combined product would be $2.31. Fixed costs for the upcoming year are estimated at $323,400. Recall that the totals of all the sales mix percents must be 100%. Determine the amounts to complete the following table.

Type of Bookshelf	Percent of Sales Mix	Break-Even Sales in Units	Break-Even Sales in Dollars
Basic	fill in the blank 7a0224fbc009049_1%	fill in the blank 7a0224fbc009049_2	$fill in the blank 7a0224fbc009049_3
Deluxe	fill in the blank 7a0224fbc009049_4%	fill in the blank 7a0224fbc009049_5	$fill in the blank 7a0224fbc009049_6

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	Cover-to-Cover Company	Biblio Files Company
Contribution margin ratio (percent)	fill in the blank 5d4936053f95060_1%	fill in the blank 5d4936053f95060_2%
Unit contribution margin	$fill in the blank 5d4936053f95060_3	$fill in the blank 5d4936053f95060_4
Break-even sales (units)	fill in the blank 5d4936053f95060_5	fill in the blank 5d4936053f95060_6
Break-even sales (dollars)	$fill in the blank 5d4936053f95060_7	$fill in the blank 5d4936053f95060_8