The following CVP income statements are available for Old Company and New Compan
ID: 2385739 • Letter: T
Question
The following CVP income statements are available for Old Company and New Company.
Old Company
New Company
Sales revenue
$400,000
$400,000
Variable costs
180,000
80,000
Contribution margin
220,000
320,000
Fixed costs
170,000
270,000
Net income
$50,000
$50,000
*NEW COMPANY break even & safety ratio last 2 spaces down on right side
$
$
$
$
Old Company
New Company
Sales revenue
$400,000
$400,000
Variable costs
180,000
80,000
Contribution margin
220,000
320,000
Fixed costs
170,000
270,000
Net income
$50,000
$50,000
Explanation / Answer
4.4
6.4
Old Company New Company Break even point in dollars 309091 337500 Margin of safity ratio 22.73% 15.63%