Please explain requirement 4 in great detail.
E3-36 (similar to) High End Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles a Lopez understand High End Beauty's cost structure. (Click the icon to view the operating income statement.) Read the requirements. 1 Requirements 1. Recast the income statement to emphasize contribution margin. 2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2017 3. What is the margin of safety (in units) for June 2017? 4. If sales in June were only 8,500 units and High End's tax rate is 30%, calculate its net income. Los Angeles area. It presents the monthly operating income statement shown here to George Lopez, a potential investor in the business. Help Mr. Data Table - X High End Beauty Operating Income Statement, June 2017 10,000 $ 120,000 55,000 19.920 Units sold Revenues Cost of goods sold Variable manufacturing costs Fixed manufacturing costs Total Gross margin Operating costs Variable marketing costs 74,920 45,080 17,000 18,000 Fixed marketing and administrative costs 35.000 Total Operating costs 10,080 Operating income Requirement 1. Recast the income statement to emphasize contribution margin. 10,000 $ 120,000 High End Cosmetics Operating Income Statement, June 2017 Units sold Revenues Variable costs Variable manufacturing costs 55,000 Variable marketing costs 17,000 Total variable costs Contribution margin Fixed costs Fixed manufacturing costs 19,920 Fixed marketing and administration costs 18,000 Total fixed costs 72,000 48,000 37,920 Operating income 10,080 Requirement 2. Calculate the contribution margin percentage and breakeven point in units and revenue Choose from any list or enter any number in the input fields and then click Check Answer. E3-36 (similar to) High End Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating in Lopez understand High End Beauty's cost structure. (Click the icon to view the operating income statement.) Read the requirements Operating income Requirement 2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2017 Begin by selecting the formula to calculate the contribution margin percentage. Then enter the amounts in the formula to calculate the percent. (Enter Contribution margin / Revenues Contribution margin percentage ($ 48,000 S 120,000 - 40 % Determine the formula for the breakeven point in units. Next, enter the amounts to calculate the breakeven point. (Enter the contribution margin per un Fixed costs Contribution margin per unit - Breakeven point in units $ 37,920 $ 4.80 5 7 ,900 units Determine the formula to calculate the breakeven point in revenues. Then, enter the amounts in the formula. (Enter the percentage as a whole numbe Fixed costs 37,920 Contribution margin percentage 40 % - Breakeven point in revenues $ 94,800 Requirement 3. What is the margin of safety (in units) for June 2017? Determine the formula to calculate the margin of safety in units. Then enter the amounts in the formula and calculate the margin of safety for June 201 Current sales level in units 10,000 - - Breakeven point in units 7.900 Margin of safety 2,100 units Requirement 4. If sales in June were only 8,500 units and High End's tax rate is 30%, calculate its net income. Complete the table below to calculate High End's net income if sales were only 8,500 units and High End's tax rate is 30%. (Round the tax expense to the nearest whole number.) Contribution margin Less: Fixed costs Operating income Less Tax expense Net Income
