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Using the information in the example we have been using, how much would net income be if the company sold 500 bikes?  (Reminder: Sales Price = $500, Variable Costs = $300)

Using the information in the example we have been using, how much would net income be if the company sold 500 bikes?  (Reminder: Sales Price = $500, Variable Costs = $300)

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 information in the example we have been using, how much would net income be if the company sold 500 bikes?  (Reminder: Sales Price = $500, Variable Costs = $300)

 

 

Basics of Cost-Volume-Profit Analysis The contribution income statement is helpful to managers in judging the impact on profits of changes in selling price, cost, or volume. The emphasis is on cost behavior. Racing Bicycle Company Contribution Income Statement For the Month of June $ Sales (500 bicycles) Less: Variable expenses Contribution margin. Less: Fixed expenses Net operating income $ 250,000 150,000 100,000 80,000 20,000 Contribution Margin (CM) is the amount remaining from sales revenue after variable expenses have been deducted. It is first used to cover Fixed Expenses. Any remaining contributes to net operating income.
Transcribed Image Text:Basics of Cost-Volume-Profit Analysis The contribution income statement is helpful to managers in judging the impact on profits of changes in selling price, cost, or volume. The emphasis is on cost behavior. Racing Bicycle Company Contribution Income Statement For the Month of June $ Sales (500 bicycles) Less: Variable expenses Contribution margin. Less: Fixed expenses Net operating income $ 250,000 150,000 100,000 80,000 20,000 Contribution Margin (CM) is the amount remaining from sales revenue after variable expenses have been deducted. It is first used to cover Fixed Expenses. Any remaining contributes to net operating income.
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