For its top managers, Worldwide Travel formats its income statement as follows:
WORLDWIDE TRAVEL
Contribution Margin Income Statement
Three Months Ended March 31, 2018
Net Sales Revenue .................... $ 316,500
Variable Costs ...........................136,095
Contribution Margin.................... 180,405
Fixed Costs.............................. 173,000
Operating Income ....................... $ 7,405
World-wide's relevant range is between sales of $253,000 and $368,000.
Requirements
1. Calculate the Contribution Margin ratio.
2. Prepare two Contribution Margin income statements: one at the $253,000 sales level and one at the $368,000 sales level. (The proportion of each sales dollar that goes toward variable costs is constant within the relevant range.)