The controller of Andreston Company prepared the following projected income statement: Sales .... $93,000 Total variable cost
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The controller of Andreston Company prepared the following projected income statement:
Sales ………………..……………….. $93,000
Total variable cost ………………….. 70,680
Contribution margin ……………….. $22,320
Total fixed cost ……………………. 12,000
Operating income ………………….. $10,320
Required:
1. Calculate the contribution margin ratio.
2. Calculate the variable cost ratio.
3. Calculate the break-even sales revenue for Andreston.
4. Conceptual Connection: How could Andreston increase projected operating income without increasing the total sales revenue?
Contribution MarginContribution 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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Related Book For
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
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