Contribution Income Statement and Cost$-$Volume$-$Profit Graph

Picnic Time produces a picnic basket that is sold for $$100$ 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.

Variable Costs per Unit Fixed Costs per Month

Manufacturing: Manufacturing overhead $$36,000$

Direct materials $$25$ Selling and administrative $68,000$

Direct labor $15$ Total $$104,000$

Manufacturing overhead $5$ $$45$

Selling and administrative $4$

Total $$49$

Required

Prepare a contribution income statement for July.

Do not use any negative signs with your answers.

Picnic Time

Contribution Income Statement

For the Month of July

Sales Answer

$40,000$

Less variable costs

Direct materials Answer

$100,000$

Direct labor Answer

$60,000$

Manufacturing overhead Answer

$20,000$

Selling and administrative Answer

$16,000$

Answer

$196,000$

Contribution margin Answer

$204,000$

Less fixed cost:

Manufacturing overhead Answer

$36,000$

Selling and administrative Answer

$68,000$

Answer

$104,000$

Profit Answer

$100,000$