For its top managers, Worldwide Travel formats its income statement as follows:

WORLDWIDE TRAVEL

Contribution Margin Income Statement

Three Months Ended March 31, 2014

Sales Revenue ............. $ 317,500

Variable Costs ............. 95,250

Contribution Margin ............222,250

Fixed Costs ..............175,000

Operating Income .............$ 47,250

Worldwide’s relevant range is between sales of $ 245,000 and $ 364,000.

Requirements

1. Calculate the Contribution Margin ratio.

2. Prepare two Contribution Margin income statements: one at the $ 245,000 sales level and one at the $ 364,000 sales level.