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A contribution margin income statement organizes costs by behavior (variable or fixed), rather than by function (operating, selling, or administrative). The contribution margin is the


A contribution margin income statement organizes costs by behavior (variable or fixed), rather than by function (operating, selling, or administrative). The contribution margin is the difference between sales and

gross profitvariable expensesfixed expensesoperating incomevariable expenses

.


Byron Manufacturing has one product that sells for $24.00 per unit. The company estimates fixed costs at $6,000, direct materials at $4.00 per unit, direct labor at $5.00 per unit, and variable overhead costs at $3.00 per unit.

Fill in the contribution margin income statement when 730 units are sold:

Byron Manufacturing Contribution Margin Income Statement
Sales

Less:

Variable costsFixed costsVariable costs


Contribution margin

Less:

Variable costsFixed costsFixed costs


Operating income

Calculate Byron Manufacturing's per unit contribution margin : 

.


Calculating the Break-even Point:


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