Contribution Margin

Less: Fixed Expenses

Less: Variable Expenses

Operating Income (loss)

Revenue

Alderman Dry Cleaners has determined the following about its costs: Total variable expenses are $42,000, total fixed expenses are $32,000, and the sales revenue needed to break even is $40,000. Determine the company's current 1) sales revenue and 2) operating income. (Hint: First, find the contribution margin ratio; then prepare the contribution margirn income statement.) Use the contribution margin income statement and the shortcut contribution margin approaches to determine Alderman's current (1) sales revenue and (2) operating income. Begin by computing the contribution margin ratio. (Enter the result as a whole number.) The contribution margin ratio is % Prepare the contribution margin income statement at the calculated sales level Alderman Drycleaners Contribution Margin Income Statement Next Module: Week-5, 11-19-18 to 11-26-18