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 (14,000 units $12 per unit)
$ 168,000
Variable costs (14,000 units $7 per unit)
98,000
Contribution margin (14,000 units $5 per unit
70,000
Fixed costs
57,000
Income
$ 13,000
1. The 14,000 units produced and sold increases to 14,500 units and fixed costs increase by $6,300. 2. Unit selling price decreases by 5% and units produced and sold increase by 8%. Hint: A unit increase has both a sales and costs impact. 3. Fixed costs increase by $16,100, variable costs per unit decrease by $1, and units produced and sold increase by 400.
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