...statement is set using a contribution format. The contribution format centers on the idea that each unit sold provides a certain amount of contributionmargin that goes to covering fixed costs.
In 2004 expenses like distribution and transport (29,988) and the sales commissions (73,573) have been reclassified (contribution format) as variable selling costs on page 33 ([104]).
2. Why do you think cost of sales is...

...has decreased. |
5. | Sales are $500,000 and variable costs are $350,000. What is the contributionmargin ratio? |
A) | 43%. |
B) | 30%. |
C) | 70%. |
D) | Cannot be determined because amounts are not expressed per unit. |
6. | Barcelona Bagpipes produces two models: Model 24 has sales of 500 units with a contributionmargin of $40 each; Model 26 has sales of 350 units with a contribution...

...Excel Assignment #2
Preparing a ContributionMargin Income Statement and Operating Leverage
Summer 2013
1. Assume that a company is budgeting to sell 2,500 units of a product at a selling price per unit of $32. The variable cost per unit is $26 and total fixed costs are $5,000.
REQUIRED
Prepare a contributionmargin income statement and calculate operating leverage.
2. Suppose the company is unsure exactly how many...

...profitability.
E. All of these.
2. The break-even point is that level of activity where:
A. total revenue equals total cost.
B. variable cost equals fixed cost.
C. total contributionmargin equals the sum of variable cost plus fixed cost.
D. sales revenue equals total variable cost.
E. profit is greater than zero.
3. The unit contributionmargin is calculated as the difference between:
A. selling price and fixed cost per unit....

...units. 2. The contributionmargin per chair for the Colonial model is: A) $51. B) $16. C) $35. D) $25. The answer is b. CM = P-V = $60 - $35 - $9 = $16.
Page 1
3. If the sales mix and sales units are as expected, the break-even in sales dollars is closest to: A) $132,000. B) $148,500. C) $143,000. D) $139,764. Price: Variable Costs: ContributionMargin: ContributionMargin Ratio: The answer is c....

...Unit contributionmargin, contributionmargin ratio and variable cost ratio.
B. Breakeven point in units and in pesos.
C. Margin of safety in units and in pesos, and margin of safety ratio.
D. Profit Ratio
E. The amount of profit using the margin of safety
F. If sales increase by P300,000. How much would you expect profit to increase?
SOLUTIONS:
A. Units Unit Price Amount Rate...

... 1.
The following is Addison Corporation's contribution format income statement for last month:
Sales $1,000,000
Less: Variable Expenses $ 700,000
ContributionMargin $ 300,000
Less: Fixed Expenses $ 180,000
Operating Income $ 120,000
The company has no beginning or ending inventories. A total of 20,000 units were produced and sold last month.
What is the company's...

...ContributionMargin and Break Even Analysis.
Many factors come into play in determining business success. One of them is the financial factor. For a company to set financial goals it is crucial that its management know in detail the products or services they sale or provide. This is the analysis of two different scenarios at Aunt Connie's Cookies Simulation (University of Phoenix, 2011) and the financial performance of Jamestown Electric Supply Company...