Question

Shown here is an income statement in the traditional format for a firm with a sales volume of 15 000 units format for a Revenues Cost of goods sold (39,000 $2 95/unit) Gross proft $150,000 $% 760 Seling ($2,150 $0 90/unit) Administration ($5,200+$0.40unit) 15,650 Operating income S 69,900 Required: a. Prepare an income statement i the contribution margin format Variable expenses Total vaniable expenses Fixed expenses Total fixed expenses Refer to your answer to part a when total revenues were $150,000. d-1. Cabaiate the finn''s operating roome ผู้0r loss)if unit seling prioe and vanate expense per unit do not change and total se onues increase by $14.500. (Do not round intermed ate d-2, Cablate the 5tm's operating roome 4or loss)if unt seling poe and varatie expense per unit do not change and total tevenues decrease by $8.00 (Do not round antermediate

Answer 1

a
Contribution margin Income Statement
Revenues		150000
Variable expenses:
Cost of goods sold	44250		=15000*2.95
Selling expenses	13500		=15000*0.9
Administrative expenses	6000		=15000*0.4
Total variable expenses		63750
Contribution margin		86250
Fixed expenses:
Cost of goods sold	9000
Selling expenses	2150
Administrative expenses	5200
Total Fixed expenses		16350
Operating income		69900
b
Contribution margin per unit	5.75		=86250/15000
Contribution margin ratio	57.50%		=86250/150000
c-1
Contribution margin	115000		=20000*5.75
Less: Fixed expenses	16350
Operating income	98650
c-2
Contribution margin	40250		=7000*5.75
Less: Fixed expenses	16350
Operating income	23900
d-1
Contribution margin	94587.50		=(150000+14500)*57.5%
Less: Fixed expenses	16350
Operating income	78237.50	or 78238
d-2
Contribution margin	81650		=(150000-8000)*57.5%
Less: Fixed expenses	16350
Operating income	65300