Question

Shown here is an income statement in the traditional format for a firm with a sales volume of 7,600 units. Cost formulas also are shown:

Revenues	$	34,100
Cost of goods sold ($5,900 + $2.20/unit)		22,620
Gross profit	$	11,480
Operating expenses:
Selling ($1,170 + $0.11/unit)		2,006
Administration ($3,800 + $0.20/unit)		5,320
Operating income	$	4,154

a. Prepare an income statement in the contribution margin format.

	Contribution Margin Income Statement Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses

b. Calculate the contribution margin per unit and the contribution margin ratio. (Do not round intermediate calculations. Round contribution margin per unit to 2 decimal places

	Contribution margin per unit Contribution margin ratio %

c-1. Calculate the firm's operating income (or loss) if the volume changed from 7,600 units to 11,400 units. (Do not round intermediate calculations.)

c-2. Calculate the firm's operating income (or loss) if the volume changed from 7,600 units to 3,800 units. (Do not round intermediate calculations.

Refer to your answer to part a for total revenues of $34,100.

d-1. Calculate the firm’s operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues increase by $15,000. (Round intermediate calculations to 2 decimal places.)

d-2. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues decrease by $2,500. (Round intermediate calculations to 2 decimal places.)

Answer 1