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Presented here is the income statement for Fairchild Co. for March: Sales $ 84,000 Cost of goods sold 40,000 Gross profit $ 44,000 Operating expenses
Presented here is the income statement for Fairchild Co. for March:
Sales | $ | 84,000 | |
Cost of goods sold | 40,000 | ||
Gross profit | $ | 44,000 | |
Operating expenses | 31,500 | ||
Operating income | $ | 12,500 | |
Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 33%.
Required:
a. Rearrange the preceding income statement to the contribution margin format.
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b. Calculate operating income if sales volume increases by 10%. (Do not round intermediate calculations.)
c. Calculate the amount of revenue required for Fairchild to break-even.
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