Shown here is an income statement in the traditional format for a firm with a sales volume of 15,000 units:
Prepare an income statement in the contribution margin format.
Calculate the contribution margin per unit and the contribution margin ratio. (Do not round your intermediate calculations. Round contribution margin per unit to 2 decimal places.)
Calculate the firm\'s operating income (or loss) if the volume changed from 15,000 units to 20,000 units. (Do not round intermediate calculations.)
Calculate the firm\'s operating income (or loss) if the volume changed from 15,000 units to 10,000 units. (Do not round intermediate calculations.)
Calculate the firm\'s operating income (or loss) if unit selling price and variable expenses do not change and total revenues increase by $15,000. (Do not round intermediate calculations.)
Calculate the firm\'s operating income (or loss) if unit selling price and variable expenses do not change and total revenues decrease by $10,000. (Do not round intermediate calculations.)
check my workreferencesebook & resources
Solution
selling price per unit= $105,000/ 15000= $7
cost of goods sold=
Fixed cost= $8,000
variable cost = $3.6 per unit
selling exp=$13,500 (0.8 variable cost per unit)
Admin expenses= $11,500 ($0.5 variable cost per unit)
contribution margin per unit= selling price - variable cost per unit
= $7 - $4.9= $ 2.1 per unit
contribution ratio= (sales- variable cost)/sales=( 7- 4.9)/7= 30%
2. if the sales units are 20,000
the revenue= 20,000 X $7= $140,000
variable cost = ($8000 +( 20,000 X 3.6)= $80,000
gross profit= $60,000
selling cost= ($1500 + 16,000)= $175000
admin cost= $4000 + 10,000= $14,000
operating margin= $28,500
if the volume changed to 10000 units , then the revenue is
revenue= $70,000
variable cost = ($8000 +( 10,000 X 3.6)= $44,000
gross profit= $26,000
selling cost= ($1500 + 8,000)= $13000
admin cost= $4000 + 5,000= $9000
operating income= $3000
.
Shown here is an income statement in the traditional format for a firm.docx
1. Shown here is an income statement in the traditional format for a firm with a sales volume of
15,000 units:
Prepare an income statement in the contribution margin format.
Calculate the contribution margin per unit and the contribution margin ratio. (Do not round
your intermediate calculations. Round contribution margin per unit to 2 decimal places.)
Calculate the firm's operating income (or loss) if the volume changed from 15,000 units to
20,000 units. (Do not round intermediate calculations.)
Calculate the firm's operating income (or loss) if the volume changed from 15,000 units to
10,000 units. (Do not round intermediate calculations.)
Calculate the firm's operating income (or loss) if unit selling price and variable expenses do not
change and total revenues increase by $15,000. (Do not round intermediate calculations.)
Calculate the firm's operating income (or loss) if unit selling price and variable expenses do not
change and total revenues decrease by $10,000. (Do not round intermediate calculations.)
check my workreferencesebook & resources
Shown here is an income statement in the traditional format for a firm with a sales volume of
15,000 units:
Solution
selling price per unit= $105,000/ 15000= $7
cost of goods sold=
Fixed cost= $8,000
2. variable cost = $3.6 per unit
selling exp=$13,500 (0.8 variable cost per unit)
Admin expenses= $11,500 ($0.5 variable cost per unit)
contribution margin per unit= selling price - variable cost per unit
= $7 - $4.9= $ 2.1 per unit
contribution ratio= (sales- variable cost)/sales=( 7- 4.9)/7= 30%
2. if the sales units are 20,000
the revenue= 20,000 X $7= $140,000
variable cost = ($8000 +( 20,000 X 3.6)= $80,000
gross profit= $60,000
selling cost= ($1500 + 16,000)= $175000
admin cost= $4000 + 10,000= $14,000
operating margin= $28,500
if the volume changed to 10000 units , then the revenue is
revenue= $70,000
variable cost = ($8000 +( 10,000 X 3.6)= $44,000
gross profit= $26,000
selling cost= ($1500 + 8,000)= $13000
admin cost= $4000 + 5,000= $9000
operating income= $3000
