Contribution Margin

Less: Fixed Expenses

Less: Variable Expenses

Operating Income (loss)

Revenue

Dove Rain Gear sells monogrammed umbrellas on Etsy. Dove Rain Gear is currently selling 1,600 umbrellas a month at a price of $24 per umbrella. The variable cost of each umbrella sold includes $11 to purchase the merchandise from suppliers and a $4 commission paid to Etsy. Fixed costs are $2,600 per month. The company is considering raising the selling price of each umbrella to $26, but believes the number of umbrellas sold would drop by 10% as a result ofthe price increase. Should Dove Rain Gear raise the selling price of its umbrellas? Begin by preparing the contribution margin income statement at the current selling price of $24 per umbrella. Dove Rain Gear Contribution Margin Income Statement Next Module Week-5, 11-19-18 to 11-26-18 Next, calculate Dove Rain Gear's operating income if the changes are made. (Use parentheses or a minus If the changes are made, Dove Rain Gears operating income (loss) will be $ Dove Rain Gear raise the selling price of its umbrellas because its operating income will by $