Complete each of the following contribution format income statements by supplying the missing numbers. a. b. c. d. Sales revenue $enter the sales revenue amount in dollars $504,696 $enter the sales revenue amount in dollars $671,472 Variable expenses 236,284 enter the variable expenses amount in dollars 123,704 enter the variable expenses amount in dollars Contribution margin 150,052 156,624 enter the contribution margin in dollars 490,336 Fixed expenses enter the fixed expenses amount in dollars 87,320 138,084 enter the fixed expenses amount in dollars Operating income 20,502 enter the operating income amount in dollars enter the operating income amount in dollars enter the operating income amount in dollars Income taxes enter the income tax amount in dollars 20,791 20,278 63,805 Net income $14,351 $enter the net income amount in dollars $60,834 $191,415
Cost-Volume-Profit Analysis
Cost Volume Profit (CVP) analysis is a cost accounting method that analyses the effect of fluctuating cost and volume on the operating profit. Also known as break-even analysis, CVP determines the break-even point for varying volumes of sales and cost structures. This information helps the managers make economic decisions on a short-term basis. CVP analysis is based on many assumptions. Sales price, variable costs, and fixed costs per unit are assumed to be constant. The analysis also assumes that all units produced are sold and costs get impacted due to changes in activities. All costs incurred by the company like administrative, manufacturing, and selling costs are identified as either fixed or variable.
Marginal Costing
Marginal cost is defined as the change in the total cost which takes place when one additional unit of a product is manufactured. The marginal cost is influenced only by the variations which generally occur in the variable costs because the fixed costs remain the same irrespective of the output produced. The concept of marginal cost is used for product pricing when the customers want the lowest possible price for a certain number of orders. There is no accounting entry for marginal cost and it is only used by the management for taking effective decisions.
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a.
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b.
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c.
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d.
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Sales revenue
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$enter the sales revenue amount in dollars | $504,696 | $enter the sales revenue amount in dollars | $671,472 | ||||
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Variable expenses
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236,284 | enter the variable expenses amount in dollars | 123,704 | enter the variable expenses amount in dollars | ||||
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Contribution margin
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150,052 | 156,624 | enter the contribution margin in dollars | 490,336 | ||||
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Fixed expenses
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enter the fixed expenses amount in dollars | 87,320 | 138,084 | enter the fixed expenses amount in dollars | ||||
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Operating income
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20,502 | enter the operating income amount in dollars | enter the operating income amount in dollars | enter the operating income amount in dollars | ||||
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Income taxes
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enter the income tax amount in dollars | 20,791 | 20,278 | 63,805 | ||||
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Net income
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$14,351 | $enter the net income amount in dollars | $60,834 | $191,415 |
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