Question

Chapter 6 Mastery

Mechem Corporation produces and sells a single product. In April, the company sold 2,000 units. Its total sales were $160,000, its total variable expenses were $80,300, and its total fixed expenses were $57,200.

Required:

a. Construct the company's contribution format income statement for April. (Do not round intermediate calculations.)

	Sales Variable expenses Contribution margin 0 Fixed expenses Net operating income $0

. Redo the company's contribution format income statement assuming that the company sells 1,900 units. (Do not round intermediate calculations.)

	Sales Variable expenses Contribution margin 0 Fixed expenses Net operating income $0

Answer 1

A)

Sales	160,000
Variable cost	80,300
Contribution margin	79,700
Fixed cost	57,200
Net operating income	22,500

B)

Sales (160,000/2000)*1900	152,000
Variable cost (80,300/2000)*1900	76,285
Contribution margin	75,715
Fixed cost	57,200
Net operating income	18,515