Shown here is an income statement in the traditional format for a firm with a sales volume of 8,000 units. Cost formulas also are shown: Revenues $ 32,000 Cost of goods sold ($6,000 + $2.10/unit) 22,800 Gross profit $ 9,200 Operating expenses: Selling ($1,200 + $0.10/unit) 2,000 Administration ($4,000 + $0.20/unit) 5,600 Operating income $ 1,600 Required: Prepare an income statement in the contribution margin format. Calculate the contribution margin per unit and the contribution margin ratio. Calculate the firm’s operating income (or loss) if the volume changed from 8,000 units to 12,000 units. 4,000 units. Refer to your answer to part a for total revenues of $32,000. Calculate the firm’s operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues Increase $12,000. Decrease $7,000.
Shown here is an income statement in the traditional format for a firm with a sales volume of 8,000 units. Cost formulas also are shown: Revenues $ 32,000 Cost of goods sold ($6,000 + $2.10/unit) 22,800 Gross profit $ 9,200 Operating expenses: Selling ($1,200 + $0.10/unit) 2,000 Administration ($4,000 + $0.20/unit) 5,600 Operating income $ 1,600 Required: Prepare an income statement in the contribution margin format. Calculate the contribution margin per unit and the contribution margin ratio. Calculate the firm’s operating income (or loss) if the volume changed from 8,000 units to 12,000 units. 4,000 units. Refer to your answer to part a for total revenues of $32,000. Calculate the firm’s operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues Increase $12,000. Decrease $7,000.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 2MC: The following information is available for Cooke Company for the current year: The gross margin is...
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Question
Shown here is an income statement in the traditional format for a firm with a sales volume of 8,000 units. Cost formulas also are shown:
| Revenues | $ | 32,000 |
| Cost of goods sold ($6,000 + $2.10/unit) | 22,800 | |
| Gross profit | $ | 9,200 |
| Operating expenses: | ||
| Selling ($1,200 + $0.10/unit) | 2,000 | |
| Administration ($4,000 + $0.20/unit) | 5,600 | |
| Operating income | $ | 1,600 |
Required:
- Prepare an income statement in the contribution margin format.
- Calculate the contribution margin per unit and the contribution margin ratio.
- Calculate the firm’s operating income (or loss) if the volume changed from 8,000 units to
- 12,000 units.
- 4,000 units.
- Refer to your answer to part a for total revenues of $32,000.
Calculate the firm’s operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues- Increase $12,000.
- Decrease $7,000.
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