Ill never understand this accounting stuff, Blake Dunn yelled, waving the income statement he had just received from his accountant in the morning mail. Last month, we sold 2,000 stuffed State University mascots and earned $6,565 in operating income. This month, when we sold 3,000 I thought wed make $9,848. But this income statement shows an operating income of $11,615! How can I ever make plans if I cant predict my income? Im going to give Janice one last chance to explain this to me, he declared as he picked up the phone to call Janice Miller, his accountant. Will you try to explain this operating income thing to me one more time? Blake asked Janice. After I saw last months income statement, I thought each mascot we sold generated $3.28 in net income; now this month, each one generates $3.87! There was no change in the cost we paid for each mascot, so I dont understand how this happened. If I had known I was going to have $11,615 in operating income, I would have looked more seriously at adding to our product line. Taking a deep breath, Janice replied, Sure, Blake. Id be happy to explain how you made so much more operating income than you were expecting.

(b)

Using the following income statements, prepare a contribution margin income statement for March. (Round per unit answers to 2 decimal places, e.g. 52.75.)

		February		March
Sales revenue		$25,000		$37,500
Cost of goods sold		10,000		15,000
Gross profit		15,000		22,500
Rent expense		1,500		1,500
Wages expense		3,500		5,000
Shipping expense		1,100		1,650
Utilities expense		750		750
Advertising expense		1,000		1,400
Insurance expense		585		585
Operating income		$6,565		$11,615