Naomi's Quilt Shoppe sells homemade Amish quilts. Naomi buys the quilts from local Amish artisans for $290

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Naomi's Quilt Shoppe sells homemade Amish quilts. Naomi buys the quilts from local Amish artisans for $290 each, and her shop sells them for $490 each. She also pays a sales commission of 8% of sales revenue to her sales staff. Naomi leases her country-style shop for $1,300 per month and pays $1,800 per month in payroll costs in addition to the sales commissions. Naomi sold 95 quilts in February. Prepare Naomi's traditional income statement and contribution margin income statement for the month.
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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Managerial Accounting

ISBN: 978-0134128528

5th edition

Authors: Karen W. Braun, Wendy M. Tietz

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