Roma Skincare manufactures and sells a face cream to small specialty stores in Victoria, Australia. It presents the monthly operating income statement shown here to Jacob Scott, a potential investor in the business. Help Mr. Scott understand Roma Skincare’s 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 2020.
3. What is the margin of safety (in units) for June 2020?
4. If sales in June were only 12,000 units and Roma Skincare’s tax rate is 30%, calculate its net income.

Transcribed Image Text:

Home A Insert Page Layout B 1 2 3 Units sold 4 Revenues 5 Cost of goods sold 6 Variable manufacturing costs 7 8 9 Gross margin 10 Operating costs: 11 Fixed manufacturing costs Total cost of goods sold Roma Skincare Operating Income Statement June 2020 Variable marketing costs Fixed marketing & admin. costs 12 13 14 Operating income Formulas Total operating costs Data C $60,000 22,000 $ 6,000 14,000 Review View D 15,000 $120,000 $ 82,000 $ 38,000 $ 20,000 $ 18,000