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over-to-Cover Company Contribution Margin Income Statement For the Year Ended De

ID: 2465286 • Letter: O

Question

over-to-Cover Company

Contribution Margin Income Statement

For the Year Ended December 31, 2016

1

Sales

$424,000.00

2

Variable costs:

3

Manufacturing

$233,200.00

4

Selling

21,200.00

5

Administrative

63,600.00

318,000.00

6

Contribution margin

106,000.00

7

Fixed Costs:

8

Manufacturing

$5,000.00

9

Selling

4,000.00

10

Administrative

33,400.00

42,400.00

11

Income from operations

Biblio Files Company

Contribution Margin Income Statement

For the Year Ended December 31, 2016

1

Sales

$424,000.00

2

Variable costs:

3

Manufacturing

$169,600.00

4

Selling

16,960.00

5

Administrative

67,840.00

254,400.00

6

Contribution margin

169,600.00

7

Fixed Costs:

8

Manufacturing

$88,000.00

9

Selling

8,000.00

10

Administrative

10,000.00

106,000.00

11

Income from operations

$63,600.00

Review the income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statements panels. Complete the table below from the data provided in the income statements. Each company sold 84,800 units during the year.

$63,600.00

over-to-Cover Company

Contribution Margin Income Statement

For the Year Ended December 31, 2016

Explanation / Answer

Answer:

Cover-to-Cover Company Biblio Files Company Contribution margin ratio (percent) 25% 40% Unit contribution margin 1.25 2 Break-even sales (units) 33920 53000 Break-even sales (dollars) 169600 265000