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For internal planning and decision-making purposes, the owner of Five Macaws would like to translate the company's income statement into the contribution margin format. Since
For internal planning and decision-making purposes, the owner of Five Macaws would like to translate the company's income statement into the contribution margin format. Since Five Macaws is online only, all of its cost of goods sold is variable. A large portion of the selling and marketing expenses consists of freight-out charges ($19,400), which were also variable. Only 20% of the remaining selling and marketing expenses and 25% of the website expenses were variable. Of the other operating expenses, 90% were fixed. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab or if you type the numbers in, you will be marked wrong.)
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