Prepare a contribution margin format income statement; answer what-if questions Shown here is an income statement in the traditional format for a firm with a sales volume of 10,000 units. Cost formulas also are shown: ... $50,000 Revenues.... Cost of goods sold ($9,000 ? $2.60/unit). Gross pro? t...... Operating expenses: Selling ($2,300? $.1 5/unit)....... Administration ($4,700 ? $.25/unit). Operating income... ...35,000 $15,000 3,800 7,200 $4,000 Required: a. Prepare an income statement in the contribution margin format. b. Calculate the contribution margin per unit and the contribution margin ratio.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Prepare a contribution margin format income statement; answer what-if
questions Shown here is an income statement in the traditional format for a firm
with a sales volume of 10,000 units. Cost formulas also are shown:
Revenues..
Cost of goods sold ($9,000 ? $2.60/unit)
Gross pro? t.
Operating expenses:
Selling ($2,300? $.1 5/unit)
Administration ($4,700 ? $.25/unit)
Operating income
$50,000
35,000
$15,000
3,800
7,200
$4,000
Required:
a. Prepare an income statement in the contribution margin format.
b. Calculate the contribution margin per unit and the contribution margin ratio.
Transcribed Image Text:Prepare a contribution margin format income statement; answer what-if questions Shown here is an income statement in the traditional format for a firm with a sales volume of 10,000 units. Cost formulas also are shown: Revenues.. Cost of goods sold ($9,000 ? $2.60/unit) Gross pro? t. Operating expenses: Selling ($2,300? $.1 5/unit) Administration ($4,700 ? $.25/unit) Operating income $50,000 35,000 $15,000 3,800 7,200 $4,000 Required: a. Prepare an income statement in the contribution margin format. b. Calculate the contribution margin per unit and the contribution margin ratio.
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