Shown here is an income statement in the traditional format for a firm with a sales volume of 10,000 units. Cost formulas also are shown:

Revenues	$ 50,000
Cost of goods sold ($9,000 + $2.60/unit)	35,000
Gross profit	$ 15,000
Operating expenses:
Selling ($2,300 + $0.15/unit)	3,800
Administrative ($4,700 + $0.25/unit)	7,200
Operating income	$ 4,000

Required:

1. Prepare an income statement in the contribution margin format.
2. Calculate the contribution margin per unit and the contribution margin ratio.
3. Calculate the firms operating income (or loss) if the volume changed from 10,000 units to
   1. 14,000 units.
   2. 6,000 units.
4. Refer to your answer to part a for total revenues of $50,000. Calculate the firms operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues
   1. Increase $15,000.
   2. Decrease $13,000.