Prepare a projected contribution margin income statement for Markham Farm assuming it purchases the new equipment. Assume sales level remains unchanged. blankMARKHAM FARMSContribution Margin Income Statement $Sales Variable Costs $Contribution Margin Fixed Cost $Net Income (Loss)
Markham Farms reports the following contribution margin income statement for the month of August. The company has the opportunity to purchase new machinery that will reduce its variable cost per unit by $2 but will increase fixed costs by 10%.
| MARKHAM FARMS | |
| Contribution Margin Income Statement | |
| Sales (1,500 Units @ $70 per unit) | $105,000 |
| Variable Costs (1,500 Units @ $15 per Unit) | 22,500 |
| Contribution Margin | $82,500 |
| Fixed Cost | 40,000 |
| Net Income (Loss) | $42,500 |
Prepare a
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$Sales |
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Variable Costs |
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$Contribution Margin |
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Fixed Cost |
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$Net Income (Loss) |
MARGINAL COSTING INCOME STATEMENT
Marginal Costing Income Statement is One of the Important Cost Management Accounting Techniques.
Under Marginal Costing Income Statement, Net Income is Computed by deducting Total Fixed Cost from Total Contribution Margin.
Contribution Margin is Computed by deducting Total Variable Cost From Total Sales.
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