Question
Contribution Margin Income Statement A contribution margin income statement organizes costs by behavior (variable or fixed), rather than by function (operating, selling, or administrative). The
Contribution Margin Income Statement
A contribution margin income statement organizes costs by behavior (variable or fixed), rather than by function (operating, selling, or administrative). The contribution margin is the difference between sales andvariable expenses
.
Byron Manufacturing has one product that sells for $24.00 per unit. The company estimates fixed costs at $6,000, direct materials at $4.00 per unit, direct labor at $5.00 per unit, and variable overhead costs at $3.00 per unit.
Fill in the contribution margin income statement when 730 units are sold:
Byron Manufacturing
Contribution Margin Income StatementSales$Less:Variable costs
Contribution margin$Less:Fixed costs
Operating income$
Calculate Byron Manufacturing'sper unitcontribution margin: $.
Thecontribution margin ratiois50%
.
Calculating the Break-even Point:
Thebreak-even point in sales dollarsis $which is a break-even point in units ofunits.
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