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Book Instructions Arberg Company's controller prepared the following budgeted income statement for the coming year: Sales $423,000 Variable cost 321,480 Contribution margin $101,520 Fixed cost 59,520 Operating income $42,000 Required: 1. What is Arberg's variable cost ratio? What is its contribution margin ratio? 2. Suppose Arberg's actual revenues are $30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement. 3. How much sales revenue must Arberg earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer. 4. What is Arberg's expected margin of safety? 5. What is Arberg's margin of safety if sales revenue is $376,000? hen Check My Work What is Arberg's variable cost ratio? What is its contribution margin ratio? Variable cost ratio 76.00 % Contribution margin ratio 24.00% Points: 2/2 Feedback Check My Work Divide variable costs by sales. Divide contribution margin by sales. 2. Suppose Arberg's actual revenues are $30,000 more than budgeted. By how much will operating income Increase? $7,200 Points: 1/1 Feedback Check My Work Consider the relationship of sales to contribution margin. 3(a) How much sales revenue must Arberg earn to break even? $248,000 Contribution tructions Amount Descriptions Ratios and Revenue unt Descriptions Contribution Margin Income Statement 3(b) Prepare a contribution margin income statement to verify the accuracy of your answer. Rem Arberg Company Score: 39/51 Contribution Margin Income Statement For the Coming Year 1 Sales $248,000.00 2 Variable cost 146,480.00 3 Total contribution margin 4 Fixed cost 59,520.00 5 Operating income Feedback Check My Work The income statement format is based on the separation of costs into fixed and variable comp escriptions bution Margin Income Statement Margin of Safety Shaded cells have fee 4. What is Arberg's expected margin of safety? $175,000.00 Points: Sal 1/1 Var 5. What is Arberg's margin of safety if sales revenue is $376,000? Tot $128,000.00 Fix Op Points: 1/1 Feedback Check My Work Fes 4. Compute the difference between expected sales and break-even sales. The income statement format is based on the separation of costs into fixed and variable compor
