Presented here is the income statement for Big Sky Inc. for the month of February:

Based on an analysis of cost behavior patterns, it has been determined that the company’s contribution margin ratio is 25%.

Required:
a. Rearrange the preceding income statement to the contribution margin format.
b. If sales increase by 10%, what will be the firm’s operating income?
c. Calculate the amount of revenue required for Big Sky to break even.

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Sales.... Cost of goods sold. Gross profit. .... Operating expenses. Operating loss..... $130,000 109,000 $ 21,000 24,500 $ (3,500)