Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating income statement shown here to George , a potential investor in the business. Help Mr. understand Beauty's cost structure

1. Recast the income statement to emphasize contribution margin.

2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2017

3. What is the margin of safety (in units) for June 2017 ?

4. If sales in June were only 9,500 units and 's tax rate is 30 %, calculate its net income.

Bella Beauty

Operating income statement , June 2017

Units sold 10,000

Revenues 150,000

Cost of good sold

Variable Manufacturing cost 60,000

Fixed manufacturing costs 28,165

Total 88,165

gross margin 61,835

Operating cost

variable marketing costs 28,500

Fixed marketing and administrative costs 15,500

total operating cost 44,000

operating income 17,835