Mirabel Cosmetics manufactures and sells a face cream to small family-run stores in the greater Montreal area. It presents the monthly operating income statement shown here to Fran̤ois Laval, a potential investor in the business. Help Mr. Laval understand Mirabel۪s cost structure.

REQUIRED
1. Recast the income statement to emphasize contribution margin.
2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2013.
3. What is the margin of safety (in units) for June 2013?
4. If sales in June were only 8,000 units and Mirabel€™s tax rate is 30%, calculate its net income.

Transcribed Image Text:

Mirabel Cosmetics Operating Income Statement For the Month of June 2013 Units sold Revenue Cost of goods sold 10,000 $100,000 $55,000 20,000 Variable manufacturing costs Fixed manufacturing costs Total Gross margin Operating costs 75,000 25,000 Variable marketing costs Fixed marketing and administration costs 5,000 10,000 Total operating costs Operating income 15,000 S 10,000