Q1) Company XYZ is a provider of Aircraft Engine Fuel filters products and services to the Aviation and Maintenance Repairs organisations markets. A condensed 2015 income statement follows (in $$ thousands 000): Sales Total Costs of goods sold Gross margin Other operating expenses Loss from continuing operations $14,268.00 $10,617.00 $3,651.00 $4,417.00 $ (766.00) Assume that $2,400.00 thousand of the Cost of goods sold is a fixed cost representing depreciation and other production costs that do not change with the volume of production. In addition, $3,000 thousand of the other operating expenses is fixed. Note that Total costs include both Fixed & Variable costs. Also note other operating costs include both elements of fixed & variable costs. 1. Compute the Total contribution margin for 2015 and the contribution margin percentage. Explain why the contribution margin differs from the gross margin. 2. Suppose that sales for XYZ Company were predicted to increase by 10% in 2016 and that the cost behaviour was expected to continue in 2016 as it did in 2015. Compute the predicted operating income (loss) for 2016.