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
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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 

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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