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Using the following income statements, prepare a contribution margin income statement for March. (Round p decimal places, e.g. 52.75.) Sales revenue Cost of goods sold Gross profit Rent expense Wages expense Shipping expense Utilities expense Advertising expense Insurance expense Operating income February $25,000 10,000 15,000 1,500 3,500 1.100 750 1,000 585 March $37,500 15,000 22,500 1,500 5,000 1,650 750 1,400 585 $6,565 $11,615

Using the following income statements, prepare a contribution margin income statement for March. (Round p decimal places, e.g. 52.75.) Sales revenue Cost of goods sold Gross profit Rent expense Wages expense Shipping expense Utilities expense Advertising expense Insurance expense Operating income February $25,000 10,000 15,000 1,500 3,500 1.100 750 1,000 585 March $37,500 15,000 22,500 1,500 5,000 1,650 750 1,400 585 $6,565 $11,615

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Using the following income statements, prepare a contribution margin income statement for March. (Round per unit answers to 2 decimal places, e.g. 52.75.) Sales revenue Cost of goods sold Gross profit Rent expense Wages expense Shipping expense Utilities expense Advertising expense Insurance expense Operating income February March $25,000 $37,500 15,000 10,000 15,000 1,500 3,500 1,100 750 1,000 585 $6,565 22,500 1,500 5,000 1,650 750 1,400 585 $11,615
Transcribed Image Text:Using the following income statements, prepare a contribution margin income statement for March. (Round per unit answers to 2 decimal places, e.g. 52.75.) Sales revenue Cost of goods sold Gross profit Rent expense Wages expense Shipping expense Utilities expense Advertising expense Insurance expense Operating income February March $25,000 $37,500 15,000 10,000 15,000 1,500 3,500 1,100 750 1,000 585 $6,565 22,500 1,500 5,000 1,650 750 1,400 585 $11,615
Your answer is partially correct. Blake is evaluating two options to increase the number of mascots sold next month. First, he believes he can increase sales by advertising in the university newspaper. Blake can purchase a package of 12 ads over the next month for a total of $1,500. He believes the ads will increase the number of stuffed mascots sold from 1,500 to 2.200. A second option would be to reduce the selling price. Blake believes a 15% decrease in the price will result in 2.400 mascots sold. Calculate the operating income for each options? (Round per unit to 2 decimal places and final answers to 0 decimal places, eg. 5,275.) Option 1 $ Option 2 $ Operating Income Option 1 5,426 Which plan should Blake implement? 4,025 At what level of sales would he be indifferent between the two plans? (Round per unit to 2 decimal places and round up the final answer to the nearest whole unit, eg. 5,275) eTextbook and Medial mascots Aristotel
Transcribed Image Text:Your answer is partially correct. Blake is evaluating two options to increase the number of mascots sold next month. First, he believes he can increase sales by advertising in the university newspaper. Blake can purchase a package of 12 ads over the next month for a total of $1,500. He believes the ads will increase the number of stuffed mascots sold from 1,500 to 2.200. A second option would be to reduce the selling price. Blake believes a 15% decrease in the price will result in 2.400 mascots sold. Calculate the operating income for each options? (Round per unit to 2 decimal places and final answers to 0 decimal places, eg. 5,275.) Option 1 $ Option 2 $ Operating Income Option 1 5,426 Which plan should Blake implement? 4,025 At what level of sales would he be indifferent between the two plans? (Round per unit to 2 decimal places and round up the final answer to the nearest whole unit, eg. 5,275) eTextbook and Medial mascots Aristotel
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