A contribution margin income statement is a statement which shows the profit or loss for a entity for a particular product or overall performance. In contribution margin variable cost is deducted from the sales and net income is calculated. Contribution is having direct relation with sales and variable cost. The impact of all other expenses other than variable cost is irrelevant for calculation of contribution. The contribution margin ratio means calculated contribution in terms of percentage. The numerator part will be contribution amount and denominator part will net sales. The break-even point formula is calculated as the total fixed costs of production part in numerator and price per unit less the variable costs to produce the product in denominator. To Calculate: Break- even point in units and in dollars calculated is asked to be calculated in the specific question to prepare contribution margin income statement.

Question

Want to see the full answer?

Answer 1

Question

Chapter 21, Problem 11E

To determine

A contribution margin income statement is a statement which shows the profit or loss for a entity for a particular product or overall performance. In contribution margin variable cost is deducted from the sales and net income is calculated. Contribution is having direct relation with sales and variable cost. The impact of all other expenses other than variable cost is irrelevant for calculation of contribution.

The contribution margin ratio means calculated contribution in terms of percentage. The numerator part will be contribution amount and denominator part will net sales.

The break-even point formula is calculated as the total fixed costs of production part in numerator and price per unit less the variable costs to produce the product in denominator.

To Calculate:

Break- even point in units and in dollars calculated is asked to be calculated in the specific question to prepare contribution margin income statement.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Rentokil Limited issued a 10-year bond on January 1 2011. It pays interest on January1. The below amortization schedule and interest schedule reflects this. Its year end isDecember 31. a) Indicate whether the bonds were issued at a premium or a discount and explainhow you came to your decision and Compute the stated interest rate and the effective interest rate c) Prepare the journal entries for the following years:I. 2011, 2012 & 2018

Off-set the losses for the appropriate years using the rules as applied in Trinidad and Tobago and those in Jamaica: XYZ Company Limited in year of assessment 2015 makes net income of $8,000,000 and its PYL was $9,000,000. XZY registered in December 2014 for GCT/VAT and declared that its estimated income for the year of assessment 2015 as $2,999,000.

Timberline Services Company, a division of a major energy company, provides various services to the operators in the Rocky Mountain oil fields. For the most recent year, the company reported sales of $22,500,000, net operating income of $7,500,000, and average operating assets of $40,000,000. What is the margin for Timberline Services Company? Accounting