Berg Drycleaners has determined the following about its costs: Total variable expenses are $40,000, total fixed expenses

Question:

Berg Drycleaners has determined the following about its costs: Total variable expenses are $40,000, total fixed expenses are $30,000, and the sales revenue needed to break-even is $40,000. Use the income statement and the shortcut contribution mar- gin approaches to determine Berg Drycleaners’ current
(1) Sales revenue and
(2) Operating income. (Hint: First find the ratio, then prepare the income statement.)
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...