Amount Descriptions

Ratios

Contribution Margin I

Amount Descriptions

Contribution Margin Income Statement

Instructions

Amount Descriptions

Refer to the list below for the exact wording of text items within your income statement.

Amount Descriptions

Operating income

Operating loss

Sales

Total contribution margin

Total fixed cost

Total variable cost

riable Cost Ratio, Contribution Margin Ratio

Amount Descriptions

Amount Descriptions

Ratios

$Re$

Calculate the variable cost ratio.

Variable cost ratio

Points:

$\frac{0}{1}$

Calculate the contribution margin ratio.

Contribution margin ratio

Points: $\frac{0}{1}$

Amount Descriptions

Ratios

Contribution Margin Income Statement

Instructions

Amount Descriptions

$He$

Ratios

$($includes direct materials, direct labor, variable factory overhead, and

Contribution Margin Income Statement

$3.$ Prepare a contribution margin income statement based on the budgeted figures for next year. In a column next to the income statement, show the percentages based on sales for sales, total variable cost, and total contribution margin. Refer to the list of Amount Descriptions for the exact wording of text items within your income statement.

Head$-$First Company

Score: $\frac{47}{63}$

Contribution Margin Income Statement

For the Coming Year

Previous

Nextncome Statement

Instructions

Head$-$First Company plans to sell $4,700$ bicycle helmets at $$75$ each in the coming year. Unit variable cost is $$45\mathrm{.}75($includes direct materials, direct labor, variable factory overhead, and variable selling expense$).$ Fixed factory overhead is $$21,000$ and fixed selling and administrative expense is $$28,700.$

Required:

Calculate the variable cost ratio.

Calculate the contribution margin ratio.

Prepare a contribution margin income statement based on the budgeted figures for next year. In a column next to the income statement, show the percentages based on sales for sales, total variable cost, and total contribution margin.