1. Jackpot company sells a single product, has provided its contribution format income statement for June. Contribution Income Statement Sales (12,000 units) . $72,000 Variable expenses 48,000 Contribution Margin 24,000 Fixed expenses 10,000 Net Operating Income . 14,000

Required:

a. Prepare Contribution Income Statement assuming that the business expects an increase in its total sales (total revenue) by $3,000 and decrease in variable cost per unit by 10%. (2.5 marks)

b. Refer to the original data, how much is the total sales which the business needs to generate to earn a target profit of $60,000, verify your answer by preparing contribution income statement. (1.5 marks)

c. Refer to the original data and part b, calculate the percentage of increase in total profit. (1 mark)

d. Refer to the original data, calculate break-even point in units. (1 mark)