Contribution Margin Review the contribution margin income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statements. Complete the following table from the data provided on the income statements. Each company sold 81,800 units during the year. Cover-to-Cover Company Biblio Files Company Contribution margin ratio (percent) fill in the blank 038255ff407d002_1 % fill in the blank 038255ff407d002_2 % Unit contribution margin $fill in the blank 038255ff407d002_3 $fill in the blank 038255ff407d002_4 Break-even sales (units) fill in the blank 038255ff407d002_5 fill in the blank 038255ff407d002_6 Break-even sales (dollars) $fill in the blank 038255ff407d002_7 $fill in the blank 038255ff407d002_8 Income Statement - Cover-to-Cover Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8 Sales $409,000 Variable costs: Manufacturing expense $245,400 Selling expense 20,450 Administrative expense 61,350 (327,200) Contribution margin $81,800 Fixed costs: Manufacturing expense $5,000 Selling expense 4,000 Administrative expense 11,450 (20,450) Operating income $61,350 Income Statement - Biblio Files Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8 Sales $409,000 Variable costs: Manufacturing expense $163,600 Selling expense 16,360 Administrative expense 65,440 (245,400) Contribution margin $163,600 Fixed costs: Manufacturing expense $84,250 Selling expense 8,000 Administrative expense 10,000 (102,250) Operating income $61,350 Sales Mix Biblio Files Company is making plans for its next fiscal year, and decides to sell two new types of bookshelves, Basic and Deluxe. The company has compiled the following estimates for the new product offerings. Type of Bookshelf Sales Price per Unit Variable Cost per Unit Basic $5.00 $1.75 Deluxe 9.00 8.10 The company is interested in determining how many of each type of bookshelf would have to be sold in order to break even. If we think of the Basic and Deluxe products as components of one overall enterprise product called Combined, the unit contribution margin for the Combined product would be $2.31. Fixed costs for the upcoming year are estimated at $332,640. Recall that the totals of all the sales mix percents must be 100%. Determine the amounts to complete the following table. Type of Bookshelf Percent of Sales Mix Break-Even Sales in Units Break-Even Sales in Dollars Basic fill in the blank 89a071039010fc7_1 % fill in the blank 89a071039010fc7_2 $fill in the blank 89a071039010fc7_3 Deluxe fill in the blank 89a071039010fc7_4 % fill in the blank 89a071039010fc7_5 $fill in the blank 89a071039010fc7_6 Target Profit Refer again to the income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statement. Note that both companies have the same sales and net income. Answer questions (1) - (3) that follow, assuming that all data for the coming year is the same as the current year, except for the amount of sales. 1. If Cover-to-Cover Company wants to increase its profit by $40,000 in the coming year, what must their amount of sales be? $fill in the blank d1e82508e074009_1 2. If Biblio Files Company wants to increase its profit by $40,000 in the coming year, what must their amount of sales be? $fill in the blank d1e82508e074009_2 3. What would explain the difference between your answers for (1) and (2)? a. Biblio Files Company has a higher contribution margin ratio, and so more of each sales dollar is available to cover fixed costs and provide operating income. b. Cover-to-Cover Companys contribution margin ratio is lower, meaning that its more efficient in its operations. c. The companies have goals that are not in the relevant range. d. The answers are not different; each company has the same required sales amount for the coming year to achieve the desired target profit.

w the contebution martincitumble cover-to-Cover Company and Bibliofiles company other piece Statement, Cather following tablete the cuta provided on the instant. Each cool 81,0mg the Cover to Cover Bibliofi Cabin marginal (perc) dil Braw) Brak www do Income Statement Cover to Cover Cover to Cavi Company Contribution Margin Income Statement For the Year Ended December 31, 2018 Sales 549.000 Va costa Manuas 5245,400 Singen 20,450 Admite pe $1,150 Contribution margin SR200 Find us Martist 55.000 4,000 aimurai 11,450 (20,450) Operating com $6250 Income Statement Biblioi Bib File Company Contribution Margin Income Statut For the Year Ended December 31, 2018 Sa sem.C00 Variable $16,00 Seine Admin 16,30 65,440 245,400 5153,600 conium F Mandung experte Sang Admin 10.000 502,256) Operating cam Sales Mi fils Company is making plants for a next fiscal year, and do to w types of kabul, Brittand. The company has come the following ustimates for the new product of Type of Books per Unit 55.00 100 BE The commis in terms how many of wachype of bookshelf would have to be sold order to break even If welk of the base and Dale proponents of one overall product called med non marge for the Compact De 52.31. Find out for the coming year are estimated at 5332,540. fecal the total of all the same person me 100 Date the amounts to the formatius Type of Percent of Break Even Break Even S Booksul Sal Mix Sales in Units in Dollars Bar Dului afer qen to the come status for Corvetto-Low Company and Biti Lempany other speciwcome Skin. Note that both companies have the same and at Awam (1) 31 at folk song that all data for the new is the most rent year, rept for the amiantolali 1. If Cattoo Company wants to co by 540,000 ty, whats that all of it? 2. If any wants to its rule by S40,000 m the car, what musta 1. File Company contribution maron ratio, and some of the dollar stocked and provide pealing incom. b. Cover-Cow Cyckitration mattis low many time uffici per d. The wears not different was company has the same red sales ambill for the coming year to achieve the desired to profil