Question: Presented here is the income statement for Fairchild Co. for March: Sales $ 77,500 Cost of goods sold 40,500 Gross profit $ 37,000 Operating expenses

Presented here is the income statement for Fairchild Co. for March:

Sales $ 77,500
Cost of goods sold 40,500
Gross profit $ 37,000
Operating expenses 32,000
Operating income $ 5,000

Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 26%. Required:

  1. Rearrange the preceding income statement to the contribution margin format.
  2. Calculate operating income if sales volume increases by 5%.
  3. Calculate the amount of revenue required for Fairchild to break even.

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