Marlin Company, a wholesale distributor, has been operating for only a few months. The company sells three products€”sinks, mirrors, and vanities. Budgeted sales by product and in total for the coming month are shown below:

As shown by these data, net operating income is budgeted at $36,400 for the month, and breakeven sales at $430,000. Assume that actual sales for the month total $500,000 as planned. Actual sales by product are: sinks, $160,000; mirrors, $200,000; and vanities, $140,000.

Required:
1. Prepare a contribution format income statement for the month based on actual sales data. Present the income statement in the format shown above.
2. Compute the break-even point in sales dollars for the month, based on your actual data.
3. Considering the fact that the company met its $500,000 sales budget for the month, the president is shocked at the results shown on your income statement in (1) above. Prepare a brief memo for the president explaining why both the operating results and the break-even point in sales dollars are different from what wasbudgeted.

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Product Mirrors 20% Sinks Vanities Total Percentage of total sales Sales Variable expenses Contribution margin Fixed expenses Net operating income.... 48% 32% 100% $240,000 100% $100,000 100% $160,000 100% s500,000 100% 72.000 3096 80.000 8096 88,000 55% 240,000 48% $168,000 70% $20,000 20% $72,000 45% 260,000 52% 223,600 $ 36.400 Break-even point in sales dollars - Fixed espenses $223,600 0.52 Break evern CM ratio