Contribution Income Statement and Operating Leverage Florida Berry Basket harves

Question

Contribution Income Statement and Operating Leverage Florida Berry Basket harvests early-season strawberries for shipment throughout the eastern United States in March. The strawberry farm is maintained by a permanent staff of 10 employees and seasonal workers who pick and pack the strawberries. The strawberries are sold in crates containing 100 individually packaged one-quart containers. Affixed to each one-quart container is the distinctive Florida Berry Basket logo inviting buyers to "Enjoy the berry best strawberries in the world!" The selling price is $90 per crate, variable costs are $70 per crate, and fixed costs are $278,000 per year. In the year 2008, Florida Berry Basket sold 43,000 crates. (a) Prepare a contribution income statement for the year ended December 31, 2008. HINT: Use a negative sign with both "costs" answers Sales Variable costs Contribution margin Fixed costs Net income

Explanation / Answer

Statement showing computations Particulars Amount Sales = 43,000 *90     3,870,000.00 Variable Costs = 43,000*70 (3,010,000.00) Contribution Margin = Sales - variable costs         860,000.00 Fixed Costs       (278,000.00) Net Income = Contribution - Fixed Costs         582,000.00

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.