3-36 Contribution margin, gross margin, and margin of safety. Juicy Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating income statement shown here to George Lopez, a potential investor in the business. Help Mr. Lopez under- stand Juicy Beauty's cost structure. 1 Home A Insert Page Layout Formulas Data Review View B D Juicy Beauty 2 Operating Income Statement June, 2017 3 Units sold 20,000 4 Revenues $200,000 5 Cost of goods sold 6 Variable manufacturing costs $110,000 7 Fixed manufacturing costs 40,000 8 Total cost of goods sold 150,000 9 Gross margin 10 Operating costs 50,000 11 Variable marketing costs 12 13 $ 10,000 Fixed marketing & admin costs Total operating costs 14 Operating income 20,000 30,000 $ 20,000 CHAPTER 3 COST-VOLUME-PROFIT ANALYSIS 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 2017. 3. What is the margin of safety (in units) for June 2017? 4. If sales in June were only 16,000 units and Juicy Beauty's tax rate is 30%, calculate its net income.