Question
Based on the following income statement, prepare a pro-form statement for the expected operating income if the company is able to increase sales by 20%.
- Based on the following income statement, prepare a pro-form statement for the expected operating income if the company is able to increase sales by 20%.
Contribution format income statement
The Alpine House, Inc. Contribution Format Income Statement
| ||
Sales............................................................ |
| $150,000 |
Variable expenses: |
|
|
Cost of goods sold ($30,000 + $100,000 $40,000)................. | $90,000 |
|
Selling expenses ($50 per unit 200 pairs of skis)................ | 10,000 |
|
Administrative expenses ($10 per unit 200 pairs of skis)................ | 2,000 | 102,000 |
Contribution margin........................................ |
| 48,000 |
Fixed expenses: |
|
|
Selling expenses.......................................... | 20,000 |
|
Administrative expenses................................ | 20,000 | 40,000 |
Net operating income..................................... |
| $ 8,000 |
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