Presented here is the income statement for Big Sky Incorporated for the month of February: $ 60,500 52,100 $ 8,400 15,800 $ (7,400) Sales Cost of goods sold Gross profit Operating expenses Operating loss Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 19% Required: ■. Rearrange the preceding income statement to the contribution margin format. . If sales increase by 15%, what will be the firm's operating income (or loss)? -. Calculate the amount of revenue required for Big Sky to break even.
Presented here is the income statement for Big Sky Incorporated for the month of February: $ 60,500 52,100 $ 8,400 15,800 $ (7,400) Sales Cost of goods sold Gross profit Operating expenses Operating loss Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 19% Required: ■. Rearrange the preceding income statement to the contribution margin format. . If sales increase by 15%, what will be the firm's operating income (or loss)? -. Calculate the amount of revenue required for Big Sky to break even.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management
analysis
Section: Chapter Questions
Problem 4PB
Related questions
Question
im.3
![Presented here is the income statement for Big Sky Incorporated for the month of February:
$ 60,500
52,100
$ 8,400
15,800
$ (7,400)
Sales
Cost of goods sold
Gross profit
Operating expenses
Operating loss
Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 19%.
Required:
a. Rearrange the preceding income statement to the contribution margin format.
b. If sales increase by 15%, what will be the firm's operating income (or loss)?
c. Calculate the amount of revenue required for Big Sky to break even.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff86be28b-6251-4dc3-8008-73d66948b989%2F398c9500-e464-4127-b288-9bf4242de701%2Fx677kl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Presented here is the income statement for Big Sky Incorporated for the month of February:
$ 60,500
52,100
$ 8,400
15,800
$ (7,400)
Sales
Cost of goods sold
Gross profit
Operating expenses
Operating loss
Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 19%.
Required:
a. Rearrange the preceding income statement to the contribution margin format.
b. If sales increase by 15%, what will be the firm's operating income (or loss)?
c. Calculate the amount of revenue required for Big Sky to break even.
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