Rosebuds income statement is as follows: Sales (20,000 units) ........$100,000 Less variable costs - ........60,000 Contribution margin

Question:

Rosebud’s income statement is as follows:

Sales (20,000 units) ........$100,000

Less variable costs - ........60,000

Less fixed costs - .........24,000

Net income ...........$12,000

If sales increase by $15,000, by how much will net income increase?

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...