Question

For its top managers, Worldwide Travel formats its income statement as follows:
WORLDWIDE TRAVEL
Contribution Margin Income Statement
Three Months Ended March 31, 2014
Sales Revenue ............. $ 317,500
Variable Costs ............. 95,250
Contribution Margin ............ 222,250
Fixed Costs .............. 175,000
Operating Income ............. $ 47,250
Worldwide’s relevant range is between sales of $ 245,000 and $ 364,000.

Requirements
1. Calculate the contribution margin ratio.
2. Prepare two contribution margin income statements: one at the $ 245,000 sales level and one at the $ 364,000 sales level.



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  • CreatedJanuary 16, 2015
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