A manufacturers contribution margin income statement for the year follows. Prepare contribution margin income statements...
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Accounting
A manufacturers contribution margin income statement for the year follows. Prepare contribution margin income statements for each of the three separate cases below.
Contribution Margin Income Statement
Sales (11,500 units $12 per unit)
$ 138,000
Variable costs (11,500 units $7 per unit)
80,500
Contribution margin (11,500 units $5 per unit)
57,500
Fixed costs
48,000
Income
$ 9,500
The 11,500 units sold and produced increases to 12,000 units and fixed costs increase by $6,100.
Unit selling price decreases by 5% and units sold and produced increase by 6%. Hint: A unit increase has both a sales and costs impact.
Fixed costs increase by $21,100, variable costs per unit decrease by $2, and units sold and produced increase by 600.
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