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Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31 Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31
Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31 Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31 Refer again to the income statements for Cover-fo-Cover Company and Biblio Files Company on their respective income Statement panels. Note that both companies have the same sales and net income. Answer questions (1) - (3) that follow, assuming that alf data for the coming year is the same as the current yoar, except for the amount of saies. If required, round answers to the nearest dollar. 1. It Cover-to-Cover Company wants to increase its profit by $20,000 in the coming year, what must their amount of sales be? 2. If Biblio Files Company wants to increase its profit by $20,000 in the coming year, what must their amount of sales beit 3. What would explain the difterence between your answers for (1) and (2)? Biblio Files Company has a higher contribution margin ratio, and so more of each sales dollar is available to cover fixed costs and provide income from operations. Cover-to-Cover Company's contribution margin ratio is lower, meaning that it's more efficient in its operations: The companies have goals that are not in the relevant range. The answees are not different; each company has the same required sales amount for the coming year to achieve the desired target profit
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