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Problem 2 Billy Bob’s has given you the following income statement for June 2019. Sales &nbs

Problem 2 Billy Bob’s has given you the following income statement for June 2019.

Sales $ 500,000

Cost of goods sold 300,000

Gross margin 200,000

Operating expenses:

Salaries and commissions $ 80,000

Utilities 20,000

Rent 22,000

Other 18,000

Total operating expenses 140,000

Income 60,000

Billy Bob sells one product, a running shoe for $100 per pair. A 10% sales commission, included in Salaries and commissions is the only other variable cost. The manager tells you that this financial statement is not very helpful to her.

Redo the income statement using the contribution margin format.

For Billy Bob’s determine the break-even in sales dollars and units

Expert Solution

ekkarill92 answered 2 years ago

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