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The following CVP income statements are available for Cat and Dog Company Sales Var Costs Contribution Margin Fixed Costs Net Income Dog Company $ 600,000
The following CVP income statements are available for Cat and Dog Company Sales Var Costs Contribution Margin Fixed Costs Net Income Dog Company $ 600,000 S 380,000 $ 220,000 $ 170,000 S 50,000 Cat Company $ 400,000 $ 80,000 S 320,000 $ 270,000 S 50,000 Instructions: Compute the break even point in dollars (round to three places) for each company. Assuming that sales revenue increases by 25%, prepare a CVP income statement for each company. Discuss how the cost structure of these two companies affects their operating leverage and profitability
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