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Presented here is the income statement for Fairchild Co. for March: Sales $ 81,500 Cost of goods sold 40,000 Gross profit $ 41,500 Operating expenses
Presented here is the income statement for Fairchild Co. for March:
Sales | $ | 81,500 | |
Cost of goods sold | 40,000 | ||
Gross profit | $ | 41,500 | |
Operating expenses | 30,500 | ||
Operating income | $ | 11,000 | |
Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 28%. Required:
- Rearrange the preceding income statement to the contribution margin format.
- Calculate operating income if sales volume increases by 9%.
- Calculate the amount of revenue required for Fairchild to break even.
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