Question
Please answer all I need help. Presented below is the income statement for Anderson Inc. for the month of May: Sales $1,280,000 Cost of goods
Please answer all I need help.
Presented below is the income statement for Anderson Inc. for the month of May:
Sales | $1,280,000 |
Cost of goods sold | 1,180,000 |
Gross profit | $100,000 |
Operating expenses | 64,000 |
Operating income | $36,000 |
The company's contribution margin ratio is 15% (variable expenses are 85% of sales). (a) Rearrange the above income statement to the contribution margin format remember, sales are 100% of sales, and sales x contribution margin ratio = contribution margin.
(b) Calculate the break-even point in sales revenue.
(c) Calculate the sales revenue needed to generate a target profit of $50,000.
(d) Calculate the margin of safety and margin of safety ratio.
When rearranging a traditional income statement into a contribution margin format, sales revenues _______________ while operating income ______________:
A. | Increases, decreases |
B. | Decreases, increases |
C. | Both decrease |
D. | Both stay the same |
If the sales volume were to decrease 10%, from 4,000 units per month to 3,600 units per month, variable expenses per unit would:
If sales volume were to decrease 10%, from 4,000 units per month to 3,600 units per month, fixed expenses would:
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