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Presented here is the income statement for Big Sky Incorporated for the month of February:
| Sales | $ 61,500 |
| Cost of goods sold | 50,500 |
| Gross profit | $ 11,000 |
| Operating expenses | 14,900 |
| Operating loss | $ (3,900) |
Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 18%.
Required:
- Rearrange the preceding income statement to the contribution margin format.
- If sales increase by 15%, what will be the firm's operating income (or loss)?
- Calculate the amount of revenue required for Big Sky to break even.
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