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Marano Corporation produces and sells a single product. In October, the company sold 1,000 units. Its...

Marano Corporation produces and sells a single product. In October, the company sold 1,000 units. Its total sales were $156,000, its total variable expenses were $79,000, and its total fixed expenses were $55,900.

a. Construct the company's contribution format income statement for October. (Do not round intermediate calculations.)

b. Redo the company's contribution format income statement assuming that the company sells 900 units. (Do not round intermediate calculations.)

Solutions

Expert Solution

Requirement a

Contribution margin Income statement

Sales Revenue

$   1,56,000.00

Variable cost

$      79,000.00

Contribution margin

$      77,000.00

Fixed cost

$      55,900.00

Net operating income

$      21,100.00

Requirement b

Contribution margin Income statement (900 Units)

Sales Revenue

$   1,40,400.00

Variable cost

$      71,100.00

Contribution margin

$      69,300.00

Fixed cost

$      55,900.00

Net operating income

$      13,400.00

Contribution margin Income statement (900 Units)

Sales Revenue

=156000/1000*900

Variable cost

=79000/1000*900

Contribution margin

=140400-71100

Fixed cost

55900

Net operating income

69300-55900

Working

Total (A)

Units sold (B)

Per Unit(A/B)

Sales Revenue

$   1,56,000.00

1000

$ 156.00

Variable cost

$      79,000.00

1000

$    79.00

Contribution margin

$      77,000.00

1000

$    77.00

Fixed cost

$      55,900.00

Net operating income

$      21,100.00

ekkarill92 answered 1 year ago
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