Shown here is an income statement in the traditional format for a firm with a sales...
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Shown here is an income statement in the traditional format for a firm with a sales volume of 7,600 units. Cost formulas also are shown: Revenues $35,000 21,560 Cost of goods sold ($5,600 + $2.10/unit) Gross profit $13,440 Operating expenses: Selling ($1,170 + $0.08/unit) 1,778 5,170 Administration ($3,650 + $0.20/unit) Operating income $ 6,492 Required: a. Prepare an income statement in the contribution margin format. b. Calculate the contribution margin per unit and the contribution margin ratio. c. Calculate the firm's operating income (or loss) if the volume changed from 7,600 units to 1. 11,400 units. 2. 3,800 units. d. Refer to your answer to part a for total revenues of $35,000. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues 1. Increase by $14,500. 2. Decrease by $2,000. Required A Required B Required C1 Required C2 Required D1 Required D2 Prepare an income statement in the contribution margin format. Contribution Margin Income Statement Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses 0 0 0 0 Required A Required B > Required A Required B Required C1 Required C2 Required D1 Required D2 Calculate the contribution margin per unit and the contribution margin ratio. (Do not round intermediate calculations. Round "contribution margin per unit" to 2 decimal places.) Contribution margin per unit Contribution margin ratio % < Required A Required C1 > Required A Required B Required C1 Required C2 Required D1 Required D2 Calculate the firm's operating income (or loss) if the volume changed from 7,600 units to 11,400 units. (Do not round intermediate calculations.) < Required B Required C2 > Required A Required B Required C1 Required C2 Required D1 Required D2 Calculate the firm's operating income (or loss) if the volume changed from 7,600 units to 3,800 units. Refer to your answer to part a for total revenues of $35,000. (Do not round intermediate calculations.) < Required C1 Required D1 > Required A Required B Required C1 Required C2 Required D1 Required D2 Refer to your answer to part a for total revenues of $35,000. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues, calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues increase by $14,500. (Round intermediate calculations to 2 decimal places.) Show less < Required C2 Required D2 > Required A Required B Required C1 Required C2 Required D1 Required D2 Refer to your answer to part a for total revenues of $35,000. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues. calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues decrease by $2,000. (Round intermediate calculations to 2 decimal places.) Show less < Required D1 Required D2 > Shown here is an income statement in the traditional format for a firm with a sales volume of 7,600 units. Cost formulas also are shown: Revenues $35,000 21,560 Cost of goods sold ($5,600 + $2.10/unit) Gross profit $13,440 Operating expenses: Selling ($1,170 + $0.08/unit) 1,778 5,170 Administration ($3,650 + $0.20/unit) Operating income $ 6,492 Required: a. Prepare an income statement in the contribution margin format. b. Calculate the contribution margin per unit and the contribution margin ratio. c. Calculate the firm's operating income (or loss) if the volume changed from 7,600 units to 1. 11,400 units. 2. 3,800 units. d. Refer to your answer to part a for total revenues of $35,000. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues 1. Increase by $14,500. 2. Decrease by $2,000. Required A Required B Required C1 Required C2 Required D1 Required D2 Prepare an income statement in the contribution margin format. Contribution Margin Income Statement Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses 0 0 0 0 Required A Required B > Required A Required B Required C1 Required C2 Required D1 Required D2 Calculate the contribution margin per unit and the contribution margin ratio. (Do not round intermediate calculations. Round "contribution margin per unit" to 2 decimal places.) Contribution margin per unit Contribution margin ratio % < Required A Required C1 > Required A Required B Required C1 Required C2 Required D1 Required D2 Calculate the firm's operating income (or loss) if the volume changed from 7,600 units to 11,400 units. (Do not round intermediate calculations.) < Required B Required C2 > Required A Required B Required C1 Required C2 Required D1 Required D2 Calculate the firm's operating income (or loss) if the volume changed from 7,600 units to 3,800 units. Refer to your answer to part a for total revenues of $35,000. (Do not round intermediate calculations.) < Required C1 Required D1 > Required A Required B Required C1 Required C2 Required D1 Required D2 Refer to your answer to part a for total revenues of $35,000. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues, calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues increase by $14,500. (Round intermediate calculations to 2 decimal places.) Show less < Required C2 Required D2 > Required A Required B Required C1 Required C2 Required D1 Required D2 Refer to your answer to part a for total revenues of $35,000. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues. calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues decrease by $2,000. (Round intermediate calculations to 2 decimal places.) Show less < Required D1 Required D2 >
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Solution A Contribution Margin Income Statement Sales Revenue 35000 Variable Expense Cost of Goods S... View the full answer
Related Book For
Accounting What the Numbers Mean
ISBN: 978-0073527062
9th Edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
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