Prepare contribution margin income statements (Learning Objective 1)

Aussie Travel uses the contribution margin income statement internally. Aussie’s first- quarter results are as follows:

Aussie’s relevant range is between sales of $250,000 and $360,000.
Requirements 1. Prepare contribution margin income statements at sales levels of $250,000 and $360,000. (Hint: Use the contribution margin ratio.)
2. Compute breakeven sales in dollars.

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AUSSIE TRAVEL Contribution Margin Income Statement Three Months Ended March 31, 2007 Sales revenue..... Less: Variable expenses Contribution margin....... Less: Fixed expenses.. Operating income... $ 312,500 (125,000) 187,500 (170,000) $ 17,500