ALT-BE-REVENUE Choose Exercise: (1-5) Challen Company had fixed costs of $140,000 and a contribution margin ratio of 80.00% How much revenue must Challen earn, in order to break even? Hint: BE Revenue - FC/CM Ratio $175,000 1 Create a contribution income statement to prove that your breakeven point is correct. $175,000 $35,000 $140,000 $140,000 $0 REVENUE 1 -VARIABLE COSTS CONTRIBUTION MARGIN 1 1 - FIXED COSTS 1 OPERATING INCOME 1 Suppose that Challen wishes to earn an operating income of $80,000 How much revenue must Challen earn to generate this operating income Hint: Revenue Required (F $275,000 1 Create a contribution income statement to prove your answer in part 2. $275,000 REVENUE VARIABLE COSTS CONTRIBUTION MARGIN 0 - FIXED COSTS 0 OPERATING INCOME