Explanation Contribution margin income statement: A contribution margin income statement is prepared in order to assist the management in decision making. In this statement, variable expenses are deducted from sales in order to arrive at the contribution margin. This statement helps in planning as well. Company T has no physical location and for the purpose of planning and decision making, it has decided to change the income statement into the contribution margin statement. Given: 20% of selling and marketing expenses are variable 25% of website maintenance expenses are variable 90% of the other operating expenses are fixed The contribution margin income statement of the company is as follows: Company F Contribution Margin Income Statement (Variable costing) For the year ended December 31 Particulars Amount Amount Sales Revenue (given) $ 1,005,000 Less: Variable expenses: a) Variable cost of goods sold $ 669,000 b) Variable operating expenses: Selling and marketing expenses $ 27,720 (1) Website maintenance expenses $ 14,125 (2) Other operating expenses $ 1,700 (3) $ 43,545 Contribution margin $ 292,455 Less: Fixed expenses: Fixed selling and marketing expenses $ 33,280 (4) Fixed website maintenance expenses $ 42,375 (5) Other fixed operating expenses $ 15,300 (6) $ 90,955 Operating Income $ 201,500 (Table 1) Working note: Variable expenses: Selling and marketing expenses: Selling expenses = �

Managerial Accounting, Introduction To Financial Accounting, Myaccountinglab With Etext And Access Card For Managerial Acct., Myaccountlab With Etext . For Intro To Financial Acct. (4th Edition)

4th Edition

ISBN: 9780133934151

Author: Karen W. Braun

Publisher: PEARSON

See similar textbooks

Concept explainers

Property Insurance

Property insurance protects property from unforeseeable loss or damage and covers property owners' liability. Property insurance provides financial compensation to the property owner or renter in the event of damage or theft, as well as to someone other …

Question

Chapter 6, Problem 6.54BE

To determine

To Prepare: Contribution margin income statement of the Company F.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 6, Problem 6.53BE

Chapter 6, Problem 6.55BE

Students have asked these similar questions

I want the correct answer with accounting question

The U.S. government agency with authority over the financial reporting requirements of publicly traded corporations is the .... AICPA FASB IRS SEC

Financial statements report the fair market value of a company. True False

Chapter 6 Solutions

Managerial Accounting, Introduction To Financial Accounting, Myaccountinglab With Etext And Access Card For Managerial Acct., Myaccountlab With Etext . For Intro To Financial Acct. (4th Edition)

Ch. 6 - Prob. 1QC Ch. 6 - Prob. 2QC Ch. 6 - Prob. 3QC Ch. 6 - Prob. 4QC Ch. 6 - Prob. 5QC Ch. 6 - Prob. 6QC Ch. 6 - Prob. 7QC Ch. 6 - 8. (Learning Objective 5) Which of the following...Ch. 6 - Prob. 9QC Ch. 6 - Prob. 10QC

Ch. 6 - S6-1 Identify cost behavior (Learning Objective...Ch. 6 - Prob. 6.2SE Ch. 6 - Prob. 6.3SE Ch. 6 - Prob. 6.4SE Ch. 6 - S6-5 Classify cost behavior (Learning Objective...Ch. 6 - Prob. 6.6SE Ch. 6 - Prob. 6.7SE Ch. 6 - Prob. 6.8SE Ch. 6 - Prob. 6.9SE Ch. 6 - Prob. 6.10SE Ch. 6 - Prob. 6.11SE Ch. 6 - Prob. 6.12SE Ch. 6 - Prob. 6.13SE Ch. 6 - Prob. 6.14SE Ch. 6 - Prob. 6.15SE Ch. 6 - Prob. 6.16SE Ch. 6 - Prob. 6.17SE Ch. 6 - Prob. 6.18SE Ch. 6 - Prob. 6.19SE Ch. 6 - Prob. 6.20SE Ch. 6 - Prob. 6.21AE Ch. 6 - Prob. 6.22AE Ch. 6 - Prob. 6.23AE Ch. 6 - Prob. 6.24AE Ch. 6 - Prob. 6.25AE Ch. 6 - Prob. 6.26AE Ch. 6 - Prob. 6.27AE Ch. 6 - Prob. 6.28AE Ch. 6 - Prob. 6.29AE Ch. 6 - Prob. 6.30AE Ch. 6 - Prob. 6.31AE Ch. 6 - Prob. 6.32AE Ch. 6 - Prob. 6.33AE Ch. 6 - Prob. 6.34AE Ch. 6 - Prob. 6.35AE Ch. 6 - Prob. 6.36AE Ch. 6 - Prob. 6.37AE Ch. 6 - Prob. 6.38AE Ch. 6 - Prob. 6.39AE Ch. 6 - Prob. 6.40BE Ch. 6 - Prob. 6.41BE Ch. 6 - Prob. 6.42BE Ch. 6 - Prob. 6.43BE Ch. 6 - Prob. 6.44BE Ch. 6 - Prob. 6.45BE Ch. 6 - Prob. 6.46BE Ch. 6 - Prob. 6.47BE Ch. 6 - Prob. 6.48BE Ch. 6 - Prob. 6.49BE Ch. 6 - Prob. 6.50BE Ch. 6 - Prob. 6.51BE Ch. 6 - Prob. 6.52BE Ch. 6 - Prob. 6.53BE Ch. 6 - Prob. 6.54BE Ch. 6 - Prob. 6.55BE Ch. 6 - Prob. 6.56BE Ch. 6 - Prob. 6.57BE Ch. 6 - Prob. 6.58BE Ch. 6 - P6-59A Analyze cost behavior at a hospital using...Ch. 6 - Prob. 6.60AP Ch. 6 - Prob. 6.61AP Ch. 6 - Prob. 6.62AP Ch. 6 - P6-63A Absorption and variable costing income...Ch. 6 - P6 -64B Analyze cost behavior at a hospital using...Ch. 6 - Prob. 6.65BP Ch. 6 - Prob. 6.66BP Ch. 6 - Prob. 6.67BP Ch. 6 - Prob. 6.68BP Ch. 6 - Cost Behavior in Real Companies Choose a company...Ch. 6 - A6-71 Ethics of building inventory (Learning...Ch. 6 - Prob. 6.72ACT

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education