3-36. CONTRIBUTION MARGIN, GROSS MARGIN, AND MARGIN OF SAFETY. Bella Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating income statement shown here to George Sanchez, a potential investor in the business. Help Mr. Sanchez understand Bella Beauty's cost structure. Required 1. Recast the income statement to emphasize contribution margin. 2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2020. 3. What is the margin of safety (in units) for June 2020? 4. If sales in June were only 9,500 units and Bella Beauty's tax rate is 30%, calculate its net income.
3-36. CONTRIBUTION MARGIN, GROSS MARGIN, AND MARGIN OF SAFETY. Bella Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating income statement shown here to George Sanchez, a potential investor in the business. Help Mr. Sanchez understand Bella Beauty's cost structure. Required 1. Recast the income statement to emphasize contribution margin. 2. Calculate the contribution margin percentage and breakeven point in units and revenues for June 2020. 3. What is the margin of safety (in units) for June 2020? 4. If sales in June were only 9,500 units and Bella Beauty's tax rate is 30%, calculate its net income.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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