Presented here is the income statement for Big Sky Incorporated for the month of February: Sales $

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Question:

Presented here is the income statement for Big Sky Incorporated for the month of February:

Sales $ 62,000

Cost of goods sold 54,800

Gross profit $ 7,200

Operating expenses 14,900

Operating loss $ (7,700)

Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 16%.

Required:

A. Rearrange the preceding income statement to the contribution margin format.

B. If sales increase by 10%, what will be the firm's operating income (or loss)?

C. Calculate the amount of revenue required for Big Sky to break even.

Related Book For answer-question

Advanced Accounting

ISBN: 978-1118037911

1st Canadian Edition

Authors: Gail Fayerman

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Posted Date: Aug 02, 2023 07:48 AM

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Presented here is the income statement for Big Sky Incorporated for the month of February: Sales $

Question:

Expert Answer:

A Heres the income statement rearranged in the contribution margin format Sales 62000 ... View the full answer

Advanced Accounting

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