For its top managers, Worldwide Travel formats its income statement as follows: WORLDWIDE TRAVEL Contribution Margin Income

Question:

For its top managers, Worldwide Travel formats its income statement as follows:

WORLDWIDE TRAVEL

Contribution Margin Income Statement

Three Months Ended March 31, 2014

Sales Revenue ............. $ 317,500

Variable Costs ............. 95,250

Contribution Margin ............222,250

Fixed Costs ..............175,000

Operating Income .............$ 47,250

Worldwide’s relevant range is between sales of $ 245,000 and $ 364,000.


Requirements

1. Calculate the Contribution Margin ratio.

2. Prepare two Contribution Margin income statements: one at the $ 245,000 sales level and one at the $ 364,000 sales level.


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...
Fantastic news! We've located the answer you've been seeking!

Step by Step Answer:

Related Book For  answer-question

Horngrens Financial and Managerial Accounting

ISBN: 978-0133255584

4th Edition

Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura

Question Posted: