Contribution Income Statement and Analysis

Picnic Time produces a picnic basket that is sold for $$140$ per unit. Assume the company produced and sold $4,000$ baskets during July. There were no beginning or ending inventories. Variable and fixed costs follow.

REQUIRED

a$.$ Prepare a contribution income statement for July.

b$.$ Determine the break$-$even point in sales dollars.

Note: Do not round intermediate calculations

Note: Round up to the nearest dollar, enter $$80$ for $$79\mathrm{.}2$

c$.$ Suppose the cost of labor is expected to increase next year. How will this affect the

break$-$even point?

Break$-$even point will

d$.$ Determine July's margin of safety in sales dollars.

e$.$ What dollar sales volume is currently required to obtain a before$-$tax profit of $$120,000?$

Note: Do not round intermediate calculations

Note: Round up to the nearest dollar, enter $$80$ for $$79\mathrm{.}2$

$