ACC $202$

Chapter $5$ Open$-$Ended Assignment

Note: Please put your answers only in the section below the Bold Red sentence at the end of the Required section below.

"Last month, Raneer Company sold its product for $$70$ per unit. Fixed production costs were $$30,000,$ and variable production costs amounted to $$15\mathrm{.}00$ per unit. Fixed selling and administrative costs totaled $$19,000,$ and variable selling and administrative costs amount to $$5\mathrm{.}00$ per unit. Raneer produced and sold $5,400$ units last month.

$"$

Required:

A$.$ Prepare a traditional income statement $($down to Operating Income$)$ for Raneer Industries.

B$.$ Prepare a contribution margin income statement $($down to Operating Income$)$ for Raneer Industries.

C$.$ Why do companies use the contribution margin income statement format?