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Exercise 7-28 Publishing; Contribution Income Statement (LO 7-7, 7-8) Europa Publications, Inc., specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The results of the company's operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue Manufacturing costs: Fixed Variable Selling costs: Fixed Variable Administrative costs: Fixed Variable $1,900,000 511,000 982,000 38,000 68,000 78,000 33,000 Required: 1-a. Prepare a traditional income statement for the company. 1-b. Prepare a contribution income statement for the company. 2. What is the firm's operating leverage for the sales volume generated during the prior year? 3. Suppose sales revenue increases by 14 percent. What will be the percentage increase in net income? 4. Which income statement would an operating manager use to answer requirement 3? Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2 Req 3 Req 4 Prepare a traditional income statement for the company. EUROPA PUBLICATIONS, INC.

Exercise 7-28 Publishing; Contribution Income Statement (LO 7-7, 7-8) Europa Publications, Inc., specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The results of the company's operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue Manufacturing costs: Fixed Variable Selling costs: Fixed Variable Administrative costs: Fixed Variable $1,900,000 511,000 982,000 38,000 68,000 78,000 33,000 Required: 1-a. Prepare a traditional income statement for the company. 1-b. Prepare a contribution income statement for the company. 2. What is the firm's operating leverage for the sales volume generated during the prior year? 3. Suppose sales revenue increases by 14 percent. What will be the percentage increase in net income? 4. Which income statement would an operating manager use to answer requirement 3? Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2 Req 3 Req 4 Prepare a traditional income statement for the company. EUROPA PUBLICATIONS, INC.

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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Exercise 7-28 Publishing; Contribution Income Statement (LO 7-7, 7-8) Europa Publications, Inc., specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The results of the company's operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue Manufacturing costs: Fixed Variable $1,900,000 511,000 982,000 Selling costs: Fixed Variable Administrative costs: Fixed Variable 38,000 68,000 78,000 33,000 Required: 1-a. Prepare a traditional income statement for the company. 1-b. Prepare a contribution income statement for the company. 2. What is the firm's operating leverage for the sales volume generated during the prior year? 3. Suppose sales revenue increases by 14 percent. What will be the percentage increase in net income? 4. Which income statement would an operating manager use to answer requirement 3? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Reg 3 Req 4 Prepare a traditional income statement for the company. EUROPA PUBLICATIONS, INC. < Prev 2 of 4 Next > MacBook Pro @ #3 $ & 3. 4. 6. 7 8. Y U F J K
Transcribed Image Text:Exercise 7-28 Publishing; Contribution Income Statement (LO 7-7, 7-8) Europa Publications, Inc., specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The results of the company's operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue Manufacturing costs: Fixed Variable $1,900,000 511,000 982,000 Selling costs: Fixed Variable Administrative costs: Fixed Variable 38,000 68,000 78,000 33,000 Required: 1-a. Prepare a traditional income statement for the company. 1-b. Prepare a contribution income statement for the company. 2. What is the firm's operating leverage for the sales volume generated during the prior year? 3. Suppose sales revenue increases by 14 percent. What will be the percentage increase in net income? 4. Which income statement would an operating manager use to answer requirement 3? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Reg 3 Req 4 Prepare a traditional income statement for the company. EUROPA PUBLICATIONS, INC. < Prev 2 of 4 Next > MacBook Pro @ #3 $ & 3. 4. 6. 7 8. Y U F J K
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