You are a division manager at a company. Below is your divisions income statement and other information for the current year.

A. Verify that the income statement below is correct using the contribution margin format.

Assume that all costs shown can be tied directly to your division (no corporate allocations).

B. Compute breakeven point in $ of revenue.

C. Say revenues increased by $10,000 from your answer in part A, how much would your profits increase (assuming the increase is purely due to increased sales volume)?

$250,000 Contribution Margin Income Statement Sales revenue Less : Variable expenses Variable cost of goods sold $103,000 Variable selling costs $7,500 Total variable costs Contribution margin Less: Fixed costs Manufacturing costs $22,000 Administrative costs $45,000 Selling costs $47,500 Total Fixed costs Net Operating Income (Loss) $125,000-$22,000 3% of sales revenue $110,500 $139,500 $55,000-$7,500 $114,500 $25,000