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Question 2: Use the income statement shown below to answer the following questions. [30 points] a) if known $ 8,000 of the general overhead is
Question 2: Use the income statement shown below to answer the following questions. [30 points] a) if known $ 8,000 of the general overhead is considered variable overhead, what are the contribution margin and the contribution margin ratio? b) Determine the break-even volume of work for the company with a fixed overhead of $47,827, the contribution margin ratio from (a), and a required level of profit of $21,000. c) If the company thinks the result of (b) in terms of break-even volume of work exceeds the volume of work that the company can perform, what are the possible ways for the company to meet the profit requirement ($21,000) for the next year? d) Determine the profit and overhead markup. Vera of $47,827, the contribution margin ne of work exceeds the volume of work that the to meet the profit requirement ($21,000) for the 1200 4019 WEST MOUNTAIN CONSTRUCTION INCOME STATEMENT REVENUE 29 CONSTRUCTION COSTS Materials Libor Subcontract Equipment Total Construction Costs EQUIPMENT COSTS Rent and Lease Payments 3.773 Depreciation Repairs and Maintenance Fuel and Lubrication Taxes Lices, and Insurance Equipment Costs Charged to jobs Total Equipment Costs 16 7.239 VA is GROSS PROFIT OVERHEAD NET PROFIT FROM OPERATIONS 19975 1.162 OTHER INCOME AND EXPENSE PROFIT BEFORE TAX 21.157 INCOME TAX 3,921 16 PROFIT AFTER TAX
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