Question

BH (Cick the icon to view the results.) For internal planning and decision-making purposes, the owner of Fabulous Famigos would like to translate the company's income statement into the contribution margin format Since Fabulous Flamingos is online only los cost of goods sold is variable. A large portion of the wing and marketing expenses consists of freight-out charges ($19,500), which were also variable. Only 20% of the remaining selling and marketing expenses and 25% of the website expenses were variable of the other operating expenses, 90were fixed. Based on this information prepare Fabulous Flamingos contrbution margin income statement for last year Fabulous Flamingos Contribution Margin Income Statement For the Year Ended December 31 Sales revenue Choose from any list or enter any number in the input fields and then continue to the next question

Answer 1

Answer is given below

Fabulous Flamingos Contribution Margin Income Statement For the Year ended December 31 Sales Revenue $1,014,000 Less: Variable Expenses Cost of Goods sold $671,000 Variable Selling and marketing expenses $28,100 Variable website maintenance expenses $15,000 Other variable operating expenses $1,740 Total Variable Expenses $715,840 Contribution Margin $298,160 Less: Fixed expenses Fixed Selling and marketing expenses Fixed website maintenance expenses Other fixed operating expenses Total Fixed Cost $34,400 $45,000 $15,660 $95,060 Operating Income $203,100 Working note Selling and marketing expenses Less: Freight out charges Balance Variable - 20% Fixed - 80% $62,500 $19,500 $43,000 $8,600 $34,400 Variable Selling and marketing expenses $28,100