Here is the question: presented below is the income statement info: sales $110,0
ID: 2433526 • Letter: H
Question
Here is the question: presented below is the income statement info: sales $110,000 Cost of goodssold $(57,000) Grossprofit $ 53,000 Operatingexpenses $ (38,000) Operatingincome $ 15,000 Based on the info, the company's contribution margin is10% 1) Rearrange the income statement to the contribution marginformat? 2) If sales increase by 10 percent, what will be the firm'soperating income? 3) Calulate the amount of revenue required for breakeven? Here is the question: presented below is the income statement info: sales $110,000 Cost of goodssold $(57,000) Grossprofit $ 53,000 Operatingexpenses $ (38,000) Operatingincome $ 15,000 Based on the info, the company's contribution margin is10% 1) Rearrange the income statement to the contribution marginformat? 2) If sales increase by 10 percent, what will be the firm'soperating income? 3) Calulate the amount of revenue required for breakeven?Explanation / Answer
Pl chk the problem data.. Specially 10% cont margin. If I use 10%cont margin, the solution is not determinable. 1. Cont Margin = Total Cont/Total Revenue = 10% So Total Cont = 10% of Total Rev = 10%*110,000 = 11000 Now Total Cont = Total Sales - Total Var Cost So Total Var Cost = Total Sales - Total Cont = 110,000 - 11,000 =99,000 So Income stt will be : Total Sales 110,000 Less: VC 99,000 ------------------------------- Total Cont 11,000