Murugan Ltd. had the following results for the year: Sales.........................................................$45,000 Less: Operating expenses........................39,000 Net operating income.............................$ 6,000

Question:

Murugan Ltd. had the following results for the year:

Sales.........................................................$45,000
Less: Operating expenses........................39,000
Net operating income.............................$ 6,000

The average selling price for the units sold was $15 per unit and average variable cost $9 per unit.

Required:

Prepare a contribution margin income statement.

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...

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