Shown below is an income statement in the traditional format for Charlotte Corp. that sells a single
Question:
Shown below is an income statement in the traditional format for Charlotte Corp. that sells a single product having a sales volume of 15,000 units. Cost formulas are also shown (for example, COGS includes fixed costs of $23,000 and variable costs of $3.20 per unit):
Sales ...............................................................$108,000
Cost of goods sold ($23,000 + $3.20 per unit) ........................... (71,000)
Gross profit ..................................................................$ 37,000
Operating expenses:
Selling ($9,000 + $0.82 per unit) .......................................... (21,300)
Administrative ($12,800 +$0.07 per unit).................................(13,850)
Operating income ............................................................ $ 1,850
a. Create an income statement in the contribution margin format.
b. Calculate the contribution margin per unit and contribution margin ratio.
c. Calculate the firm's break‑even point in units
Accounting What the Numbers Mean
ISBN: 978-0073527062
9th Edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,