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Problem 19-05A a1-a3, b1, c-d The following CVP income statements are available for Blanc Company and Noir Company Noir CompaAssuming that sales revenue increases by 20%, prepare a CVP income statement for Blanc Company Noir Company LINK TO TEXT Assu

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Answer #1
1 Compute Contribution Margin Ratio
Particulars Contribution Margin Ratio Formula
Blanc Company (194000/485000) 0.46 Contribution Margin/Sales
Noir Company (242500/485000) 0.64
2 Compute Break Even Point in dollars for each company
Particulars Break Even Point Formula
Blanc Company   465600 (Fixed Cost / Contribution * Sales
Noir Company 469480
3 Compute Margin of safety Ratio
Particulars Margin of Safety Ratio Formula
Blanc Company                                            (485000-465600)/485000 0.04 (Sales- Breakeven Sales)/ Sales
Noir Company 0.032
4 Compute degree of Operating Leverage
Particulars Degree of Operating Leverage Formula
Blanc Company                                            25 (Sales - VC)/ Sales-VC-FC
Noir Company 31.25
5 Assume Sales increases by 20% CVP Statement
Particulars Blanc Company                                            Noir Company
Sales 582000 582000
Variable Cost 349200 291000
Contribution Margin 232800 291000
Fixed Cost 186240 234740
Net Income / Loss 46560 56260
6 Assume Sales decreases by 20% CVP Statement
Particulars Contribution Margin Fixed Cost
Sales 388000 388000
Variable Cost 232800 194000
Contribution Margin 155200 194000
Fixed Cost 186240 234740
Net Income / Loss -31040 -40740
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