The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 998,000 $ 49.90 Variable expenses 598,800 29.94 Contribution margin 399,200 19.96 Fixed expenses 321,200 16.06 Net operating income 78,000 3.90 Income taxes @ 40% 31,200 1.56 Net income $ 46,800 $ 2.34 The company had average operating assets of $508,000 during the year. 3. The company achieves a cost savings of $6,000 per year by using less costly materials.
The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 998,000 $ 49.90 Variable expenses 598,800 29.94 Contribution margin 399,200 19.96 Fixed expenses 321,200 16.06 Net operating income 78,000 3.90 Income taxes @ 40% 31,200 1.56 Net income $ 46,800 $ 2.34 The company had average operating assets of $508,000 during the year. 3. The company achieves a cost savings of $6,000 per year by using less costly materials.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The contribution format income statement for Huerra Company for last year is given below:
| Total | Unit | |||
| Sales | $ | 998,000 | $ | 49.90 |
| Variable expenses | 598,800 | 29.94 | ||
| Contribution margin | 399,200 | 19.96 | ||
| Fixed expenses | 321,200 | 16.06 | ||
| Net operating income | 78,000 | 3.90 | ||
| Income taxes @ 40% | 31,200 | 1.56 | ||
| Net income | $ | 46,800 | $ | 2.34 |
The company had average operating assets of $508,000 during the year.
3. The company achieves a cost savings of $6,000 per year by using less costly materials.
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