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Company represents a monthly operating income statement to a potential investors. Operating income statement of ABC, May 2017 Units sold 10,000 $100,000 Cost of oods
Company represents a monthly operating income statement to a potential investors. Operating income statement of ABC, May 2017 Units sold 10,000 $100,000 Cost of oods scturing costs $55,000 Variable manufacturing costs Fixed manufacturing costs otal $20,000 75 ar Operating costs Variable marketing costs Fixed marketing and admin costs 5,000 $10,000 tal ating costs 15,000 Operating income$10,000 Required 1. Recast the income statement to emphasize contribution margin. 2. Calculate the contribution margin percentage and break even point in units and revenues for May 2017 3. What is the margin of safety in May 2017 4. If sales in May were only 8,000 units and ABC profit tax rate is 30%, calculate net income 5. How many units must be sold in order to reach (a) a target operating income of $20,000 before tax (b) a target net profit of $20,000 after tax
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