Question: 4. Presented here is the income statement for Big Surf, Inc., for the month of May: Sales $ 60,500 Cost of goods sold 52,500 Gross

4.

Presented here is the income statement for Big Surf, Inc., for the month of May:

Sales $ 60,500
Cost of goods sold 52,500

Gross profit $ 8,000
Operating expenses 15,700

Operating loss $ (7,700 )

Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 18%.

Required:
a.

Rearrange the preceding income statement to the contribution margin format.

____________________________ __________________________

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____________________________ __________________________

____________________________ __________________________

____________________________ __________________________

b.

If sales increase by 10%, what will be the firm's operating income (or loss)? (Round your answer to the nearest whole dollar.)
________________ ________________________

c.

Calculate the amount of revenue required for Big Surf, Inc., to break even. (Round your answer to the nearest whole dollar.)

Break even: ________________________

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