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Snap Shark Company is a provider of imaging technology products and services to the photographic, graphic communications, and health-care markets. A condensed 2011 income statement
Snap Shark Company is a provider of imaging technology products and services to the photographic, graphic communications, and health-care markets. A condensed 2011 income statement follows (in millions): (Click the icon to view the data.) Requirements 1. Compute the total contribution margin for 2011 and the contribution margin percentage. Explain why the contribution margin differs from the gross margin. 2. Suppose that sales for Snap Shark are predicted to increase by 4% and that the cost behavior is expected to continue. Compute the predicted operating income (loss). 3. What assumptions were necessary to compute the predicted operating income in requirement 2 ? Requirement 1. Compute the total contribution margin for 2011 and the contribution margin percentage. Explain why the contribution margin differs from the gross margin. Begin by determining the formula to calculate the contribution margin. Then, enter the amounts in the formula to compute the contribution margin of Snap Shark Company
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