calculate operating income if sales volume increases by 20 639279
Prepare a contribution margin format income statement; calculate break even point Presented here is the income statement for Edwards Co. for February:
|
Sales |
$80,000 |
|
Cost of goods sold |
48,000 |
|
Gross profit |
$32,000 |
|
Operating expenses |
21,200 |
|
Operating income |
$10,800 |
Based on an analysis of cost behavior patterns, it has been determined that the company’s contribution margin ratio is 35%.
Required:
a. Rearrange the preceding income statement to the contribution margin format.
b. Calculate operating income if sales volume increases by 20%.
c. Calculate the amount of revenue required for Edwards to break even.