Shown here is an income statement in the traditional format for a firm with a sales...
Shown here is an income statement in the traditional format for a firm with a sales volume of 7,600 units. Cost formulas also are shown:
| Revenues | $ | 34,900 | |
| Cost of goods sold ($5,700 + $2.15/unit) | 22,040 | ||
| Gross profit | $ | 12,860 | |
| Operating expenses: | |||
| Selling ($1,150 + $0.08/unit) | 1,758 | ||
| Administration ($3,650 + $0.20/unit) | 5,170 | ||
| Operating income | $ | 5,932 | |
Required:
a. Prepare an income statement in the contribution margin format.
b. Calculate the contribution margin per unit and the contribution margin ratio. (Do not round intermediate calculations. Round contribution margin per unit to 2 decimal places.)
c-1. Calculate the firm's operating income (or loss) if the volume changed from 7,600 units to 11,400 units. (Do not round intermediate calculations.)
c-2. Calculate the firm's operating income (or loss) if the volume changed from 7,600 units to 3,800 units. (Do not round intermediate calculations.)
Refer to your answer to part a for total revenues of $34,900.
d-1. Calculate the firm’s operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues increase by $11,000. (Round intermediate calculations to 2 decimal places.)
d-2. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues decrease by $2,500. (Round intermediate calculations to 2 decimal places.)
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