Arberg Company's controller prepared the following budgeted income statement for the coming year:

Required:

What is Arberg's variable cost ratio? What is its contribution margin ratio?

Suppose Arberg's actual revenues are $$29,900$ more than budgeted. By how much will operating income increase? Give the answer without

preparing a new income statement.

How much sales revenue must Arberg earn to break even? Prepare a contribution margin income statement to verify the accuracy of your

answer.

What is Arberg's expected margin of safety?

What is Arberg's margin of safety if sales revenue is $$378,000?$

Ratios and Revenue

What is Arberg's variable cost ratio? What is its contribution margin ratio?

Variable cost ratio

Contribution margin ratio

Suppose Arberg's actual revenues are $$29,900$ more than budgeted. By how much will operating income increase?

$3($a$)$ How much sales revenue must Arberg earn to break even?

Contribution Margin Income Statement

$3($b$)$ Prepare a contribution margin income statement to verify the accuracy of your answer. Refer to the list of Amount Descriptions for the exact wording of text items within your income statement.

Arberg Company

Contribution Margin Income Statement

For the Coming Year