Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Douglas Dry Cleaners has determined the following about its costs: Total variable expenses are $30,000, total fixed expenses are $28,000, and the sales revenue

image text in transcribed

Douglas Dry Cleaners has determined the following about its costs: Total variable expenses are $30,000, total fixed expenses are $28,000, and the sales revenue needed to break even is $35,000. Determine the company's current 1) sales revenue and 2) operating income. (Hint: First, find the contribution margin ratio; then prepare the contribution margin income statement.) Use the contribution margin income statement and the shortcut contribution margin approaches to determine Douglas' current (1) sales revenue and (2) operating income. Begin by computing the contribution margin ratio. (Enter the result as a whole number.) The contribution margin ratio is 80% Prepare the contribution margin income statement at the calculated sales level. Douglas Drycleaners Contribution Margin Income Statement Contribution margin Less: Fixed expenses Less: Variable expenses Operating income (loss) Sales revenue

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Governmental and Nonprofit Accounting

Authors: Robert Freeman, Craig Shoulders, Gregory Allison, Robert Smi

10th edition

132751267, 978-0132751261

More Books

Students also viewed these Accounting questions

Question

5. What challenges does Qualtrics face in the future?

Answered: 1 week ago