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Last month Virgie Company sold its product for $60 per unit. Fixed production costs- $40,000...

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Accounting

Last month Virgie Company sold its product for $60 per unit.

Fixed production costs- $40,000

Variable production cost- $15 per unit

Fixed selling and administrative costs- $26,000

variable selling and administrative costs- $5 per unit.

Virgie Company produced and sold 7,000 units last month.

Required:

  1. Present a traditional income statement for Virgie Company.
  2. Present a contribution margin income statement for Virgie Company.
  3. Why do companies use the contribution margin income statement format?

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