Question
A companys contribution format income statement for the most recent month is given below: Sales (13,500 units at $20 per unit) $270,000 Variable costs $135.000
A companys contribution format income statement for the most recent month is given below: Sales (13,500 units at $20 per unit) $270,000 Variable costs $135.000 Contribution margin $135,000 Fixed costs $90,000 Net operating income $45,000 The president is convinced that 20% reductions in price, along with a $50,000 advertising surge will cause unite sales to triple. Prepare a contribution format income statement that reflects this proposal. Reconcile (using specific incremental numbers) the difference in the net operating income compared to the original scenario. Im not looking for line-by- line differences in the two income statements?
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