Global Travel uses the contribution margin income statement internally. Global's first quarter results are as follows: (Click the icon to view the income statement.) Global's relevant range is sales of between $105,000 and $655,000. Read the requirements Data Table Requirement 1. Prepare contribution margin income statements at sales levels of $200,000 and $410,000. (Hint: Use the contribution margin ratio.) Begin by preparing the contribution margin income statement at the $200,000 level. (Round the variable expense rate to the nearest whole percent. Enter losses with a minus sign or parentheses.) Global Travel Global Travel Contribution Margin Income Statement Contribution Margin Income Statement Three Months Ended March 31 Requirements Three Months Ended March 31 Sales revenue $ Sales revenue 520,000 208,000 Less: Variable expenses Less: Variable expenses 1. Prepare contribution margin income statements at sales levels of $200,000 and $410,000. (Hint: Use the contribution margin ratio.) 2. Compute breakeven sales in dollars. Contribution margin $ Contribution margin 312,000 171,000 Less: Fixed expenses Less: Fixed expenses $ 141,000 Operating income Operating income (loss) Print Done Print Done Stewart's Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of $630,000 and a contribution margin of 75% of revenues. Stewart feels like he's in a giant squeeze play: The automotive manufacturers are demanding lower prices, and the steel producers have increased raw material costs. Stewart's contribution margin has shrunk to 45% of revenues. The company's monthly operating income, prior to these pressures, was $157,500. Read the requirements. Requirement 1. To maintain this same level of profit, what sales volume (in sales revenue) must Stewart now achieve? Requirements Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach. ( Target sales in dollars Contribution margin per unit Contribution margin ratio Fixed expenses Operating income Units sold Variable expenses 1. To maintain this same level of profit, what sales volume (in sales revenue) must Stewart now achieve? 2. Stewart believes that his monthly sales revenue will only go as high as $1,050,000. He is thinking about moving operations overseas to cut fixed costs. If monthly sales are $1,050,000, by how much will he need to cut fixed costs to maintain his prior profit level of $157,500 per month? Print Done