Shown here is an income statement in the traditional format for a firm with a sales volume of 17,500 units: Revenues $ 175,500 Cost of goods sold ($11,500 + $2.95/unit) 69,025 Gross profit $ 106,475 Operating expenses: Selling ($2,000 + $1.20/unit) 25,400 Administration ($5,250 + $0.45/unit) 14,025 Operating income $ 67,050 Required: a. Prepare an income statement in the contribution margin format. Contribution Margin Income Statement Variable expenses: Total variable expenses 0 0 Fixed expenses: Total fixed expenses 0 $0 b. Calculate the contribution margin per unit and the contribution margin ratio. (Do not round intermediate calculations. Round your answers to 2 decimal places.) c|. Calculate the firm's operating income (or loss) if the volume changed from 19,500 units to 1. 24,500 units. 2. 11,500 units. d. Refer to your answer to part a when total revenues were $175,500. Calculate the firm's operating income (or loss) if unit selling price and variable expense per unit do not change and total revenues Increase by $14,500. Decrease by $8,500.
Shown here is an income statement in the traditional format for a firm with a sales volume of 17,500 units:
Revenues $ 175,500
Cost of goods sold ($11,500 + $2.95/unit) 69,025
Gross profit $ 106,475
Operating expenses: Selling ($2,000 + $1.20/unit) 25,400
Administration ($5,250 + $0.45/unit) 14,025
Operating income $ 67,050
Required: a. Prepare an income statement in the contribution margin format. Contribution Margin Income Statement Variable expenses: Total variable expenses 0 0 Fixed expenses: Total fixed expenses 0 $0
b. Calculate the contribution margin per unit and the contribution margin ratio. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
c|. Calculate the firm's operating income (or loss) if the volume changed from 19,500 units to 1. 24,500 units. 2. 11,500 units.
d. Refer to your answer to part a when total revenues were $175,500. Calculate the firm's operating income (or loss) if unit selling price and variable expense per unit do not change and total revenues Increase by $14,500.
Decrease by $8,500.
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