On a contribution margin income statement, sales revenue less variable expenses equals
a. gross profit
b. contribution margin
c. operating expenses
d. operating income
On a contribution margin income statement, sales revenue less variable expenses equals
a. gross profit
b. contribution margin
c. operating expenses
d. operating income
Related questions
Plyler Enterprises sells garage doors in Erie, PA and hasprovided the following information:
# of unitssold 15,000
Average sellingprice $25per unit
Variable sellingexpense $5per unit
Variable administrativeexpense $2.50per unit
Fixed sellingexpenses $50,000
Fixed Administrativeexpenses $30,000
Inventory atbeginning $32,000
Inventory atend $50,000
Inventorypurchases $152,000
1. Provide the figures for the TRADITIONAL income statementbelow for Plyler Enterprises (ignore taxes):
Account | Amount | Show Calculations |
Sales | ||
Cost of goods sold | ||
Gross margin | Sales less cost of goods sold | |
Selling expenses | ||
Administrative expenses | ||
Net operating income | Gross margin less Selling and Administrative |
2. Provide the figures for the CONTRIBUTION FORMAT incomestatement below for Plyler Enterprises (ignore taxes):
Account | Amount | Show Calculations |
Sales | ||
Variable expenses: | ||
Cost of goods sold | ||
Selling expenses | ||
Administrative exp. | ||
Contribution margin | Sales less variable expenses | |
Fixed expenses: | ||
Selling expenses | ||
Administrative exp. | ||
Net operating income | Sales less variable and fixed expenses | |
Shown here is an income statement in thetraditional format for a firm with a sales volume of 7,900 units.Cost formulas also are shown: |
| Revenues | $ | 34,500 | |
| Cost of goods sold ($5,600 + $2.2/unit) | 22,980 | ||
| Gross profit | $ | 11,520 | |
| Operating expenses: | |||
| Selling ($1,180 +$0.1/unit) | 1,970 | ||
| Administration ($3,550 +$0.2/unit) | 5,130 | ||
| Operating income | $ | 4,420 | |
| | | ||
the optional account names for the three boxes under variableexpense are:
Requirement 1: |
Prepare an income statement in the contributionmargin format. (Omit the "$" sign in yourresponse.) |
| revenues | $ | |
| Variable expenses: | ||
| cost of good sold | $ | |
selling expense | ||
| administrative expense | ||
| Total variable expenses | ||
| Contribution margin | $ | |
| Fixed expenses: | ||
| costof good sold | $ | |
| admistratitve expenses | ||
| selling expenses | ||
| Total fixed expenses | ||
| operating income | $ | |
| | ||
| Requirement 2: |
Calculate the contribution margin per unit andthe contribution margin ratio. (Omit the "$" and "%" signs inyour response. Round contribution margin per unit to 2 decimalplaces and contribution margin ratio to whole number.) |
| Contribution margin per unit | $ |
| Contribution margin ratio | % |
| Requirement 3: | |
| (a) | Calculate the firm's operating income (or loss)if the volume changed from 7,900 units to 11,850 units.(Do not round yourintermediate calculations. Round your answer to the nearest dollaramount. Omit the "$" sign in your response.) |
| operating income | $ |
| (b) | Calculate the firm's operating income (or loss)if the volume changed from 7,900 units to 3,950 units. (Do not round your intermediatecalculations. Round your answer to the nearest dollar amount. Inputall amount as positive values. Omit the "$" sign in yourresponse.) |
| operating income | $ |
| Requirement 4: | |
| Refer to your answer to requirement 1 for total revenues of$34,500. | |
| (a) | Calculate the firm%u2019s operating income (orloss) if unit selling price and variable expenses per unit do notchange, and total revenues increase by $10,500. (Do not round your intermediatecalculations. Round your answer to the nearest dollar amount. Omitthe "$" sign in your response.) |
| operating income | $ |
| (b) | 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 $3,000. (Do not round your intermediatecalculations. Round your answer to the nearest dollar amount. Inputthe amount as positive value. Omit the "$" sign in yourresponse.) |
| operating income | $ |
