For its top managers, Global Travel formats its income statement as follows:
GLOBAL TRAVEL
Contribution Margin Income Statement
Three Months Ended March 31, 2016
Sales Revenue ....... $ 318,500
Variable Costs.......111,475
Contribution Margin ......207,025
Fixed Costs ........175,000
Operating Income ....... $ 32,025
Global’s relevant range is between sales of $250,000 and $360,000.
Requirements
1. Calculate the Contribution Margin ratio.
2. Prepare two Contribution Margin income statements: one at the $250,000 sales level and one at the $360,000 sales level.