a. Prepare an income statement in the contribution margin format statement.
b. Calculate the contribution margin per unit and the contribution margin ratio.
c. Calculate the firms operating income (or loss) if the volume changed from 15000 units to
1. 20000 units
2. 10000 units
d. Refer to your answer in part a when total revenues were $105000. Calculate the firm's operating income (or loss) if unit selling price and variable expenses do73500 not change and revenues
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.)
the optional account names for the three boxes under variableexpense are:
Requirement 1:
Prepare an income statement in the contributionmargin format. (Omitthe "$" sign in your response.)
revenues
$
Variableexpenses:
cost of good sold
$
selling expense
administrative expense
Totalvariable expenses
Contribution margin
$
Fixedexpenses:
cost of good sold
$
admistratitve expenses
selling expenses
Total fixedexpenses
operating income
$
Requirement 2:
Calculate the contribution margin per unit and thecontribution margin ratio. (Omit the "$" and "%" signs in your response. Roundcontribution margin per unit to 2 decimal places and contributionmargin ratio to whole number.)
Contribution margin perunit
$
Contribution margin ratio
%
Requirement3:
(a)
Calculate the firm's operating income (or loss) ifthe volume changed from 7,900 units to 11,850 units. (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) ifthe 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
$
Requirement4:
Refer to your answer to requirement 1for total revenues of $34,500.
(a)
Calculate the firm%u2019s operating income (or loss)if unit selling price and variable expenses per unit do not change,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) ifunit 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.)
