3-36 Contribution margin, gross margin, and margin of safety. Roma Skincare manufactures and sells a face cream to small specialty stores in Victoria, Australia. It presents the monthly operating income state- ment shown here to Jacob Scott, a potential investor in the business. Help Mr. Scott understand Roma Skincare's cost structure. Home Insert Page Layout Formulas Data Review View A 1 Roma Skincare Operating Income Statement June, 2017 3 Units sold 15,000 4 Revenues $1,20,000 5 Cost of goods sold 6 Variable manufacturing costs $60,000 7 Fixed manufacturing costs $22,000 8 Total cost of goods sold $ 82,000 9 Gross margin 10 Operating costs Variable marketing costs $ 38,000 11 $ 6,000 12 Fixed marketing & admin costs $14,000 13 Total operating costs $ 20,000

3-36 Contribution margin, gross margin, and margin of safety. Roma Skincare manufactures and sells a face cream to small specialty stores in Victoria, Australia. It presents the monthly operating income state- ment shown here to Jacob Scott , a potential investor in the business. Help Mr. Scott understand Roma Skincare's cost structure. Home Insert Page Layout Formulas Data Review View A B D 1 Roma Skincare 2 Operating Income Statement June, 2017 3 Units sold 15,000 4 Revenues $1,20,000 5 Cost of goods sold 6 Variable manufacturing costs $60,000 7 Fixed manufacturing costs $22,000 8 Total cost of goods sold $ 82,000 9 Gross margin $ 38,000 10 Operating costs 11 Variable marketing costs $ 6,000 12 Fixed marketing & admin costs $14,000 13 Total operating costs $ 20,000 ST-VOLUME-PROFIT ANALYSIS 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 12,000 units and Roma Skincare's tax rate is 30%, calculate its net income