Question 3 (Chapter 4): Using Brookcette Porks 2019 income statement, create a contribution income statement. Use the following percentages to allocate variable and fixed expenses.

• COGS 100% variable
• Marketing 80% variable, 20% fixed
• Equipment 100% fixed
• Supplies 60% variable, 40% fixed
• Salary 70% variable, 30% fixed

  Question 4 (Chapter 4): Using the 2019 contribution margin income statement from the previous question, calculate the following.

• Contribution margin ratio
• Break-even in sales
• Break-even in units
• Margin of safety in sales
• Margin of safety in units
• Operating leverage factor

Brookcette pork Contribution margin Income statement For the year ended December 31, 2019 Sales $9,425 Variable cost ($5,355) Contribution margin $4,070 Fixed cost ($620) Operating income $3,450 u Working notes: Variable costs Fixed costs COGS $4,625 COGS fully variable Marketing $50 * 80% = $40 Marketing $50 * 20% = $10 Equipment fully fixed Equipment $250 Supplies $450 * 60% = $270 Supplies $450 * 40% = $180 Salary $600 * 70% = $420 Salary $600 * 30% = $180 Total $5,355 Total $620 Brookcette pork Contribution margin Income statement For the year ended December 31, 2019 Sales $9,425 Variable cost ($5,355) Contribution margin $4,070 Fixed cost ($620) Operating income $3,450 u Working notes: Variable costs Fixed costs COGS $4,625 COGS fully variable Marketing $50 * 80% = $40 Marketing $50 * 20% = $10 Equipment fully fixed Equipment $250 Supplies $450 * 60% = $270 Supplies $450 * 40% = $180 Salary $600 * 70% = $420 Salary $600 * 30% = $180 Total $5,355 Total $620