III. Question 1 Contribution Margin Income Statement & CVP Analysis Mountain Sports Ltd. Income Statement For the Year Ending December 31, 2018 III. Question 1 Contribution Margin Income Statement & CVP Analysis (continued) $ Sales Cost of Goods Sold Gross profit on sales 1,957,427 833.623 Part B: (record answer below) $ 1,123,804 Calculate the following and explain to management what the final answer means: (show all calculations) $ Answers: a, the company's break-even point (in sales dollars) Operating expenses: Advertising Depreciation Property taxes Rent Repairs & service expenses Salaries and commissions Utilities Total operating expenses Operating income 98,900 21,528 32,000 48,000 94.944 391,160 100,000 786,532 337,272 $ b. the margin of safety percentage Part A: (answer in the Excel Solution Workbook file on the Question 1 tab) In order to evaluate the operations of Mountain Sports Ltd., you must reformat the company's 2018 Income Statement using the Contribution Margin Income Statement approach. C. the degree of operating leverage (DOL) The following information relates to operating expenses: a) Total fixed salary costs are $207,199. Employees of the Cross-Country Ski Packages, Mountain Bicycles, and Accessories divisions receive a 10% commission on all sales The Repair & Service department's employees do not receive a commission. b) The rent is fixed at $4,000 per month. c) Utilities are fixed costs. d) Repairs and Service expense varies with sales activity. e) Depreciation and property taxes are fixed costs f) Advertising costs are fixed