Presented here is the income statement for Big Sky Incorporated for the month of February $ 61,000 50,100 $ 10,900 13,600 $ (2,700) Sales Cost of goods sold Gross profit Operating expenses Operating loss Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 19%. Required: a. Rearrange the preceding income statement to the contribution margin format. b. If sales increase by 15%, what will be the firm's operating income (or loss)? c. Calculate the amount of revenue required for Big Sky to break even.
Presented here is the income statement for Big Sky Incorporated for the month of February $ 61,000 50,100 $ 10,900 13,600 $ (2,700) Sales Cost of goods sold Gross profit Operating expenses Operating loss Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 19%. Required: a. Rearrange the preceding income statement to the contribution margin format. b. If sales increase by 15%, what will be the firm's operating income (or loss)? c. Calculate the amount of revenue required for Big Sky to break even.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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Transcribed Image Text:oped
ook
ences
Presented here is the income statement for Big Sky Incorporated for the month of February:
$ 61,000
50,100
$ 10,900
13,600
$ (2,700)
Sales
Cost of goods sold
Gross profit
Operating expenses
Operating loss
Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 19%.
Required:
a. Rearrange the preceding income statement to the contribution margin format
b. If sales increase by 15%, what will be the firm's operating income (or loss)?
c. Calculate the amount of revenue required for Big Sky to break even.
Complete this question by entering your answers in the tabs below.
Required A Required B Required C
Rearrange the preceding income statement to the contribution margin format.
Transcribed Image Text:a. Rearrange the preceding income statement to the contribution margin format.
b. If sales increase by 15%, what will be the firm's operating income (or loss)?
c. Calculate the amount of revenue required for Big Sky to break even.
Complete this question by entering your answers in the tabs below.
Required A Required B Required C
Rearrange the preceding income statement to the contribution margin format.
Required A Required B Required C
$
a. Rearrange the preceding income statement to the contribution margin format.
b. If sales increase by 15%, what will be the firm's operating income (or loss)?
c. Calculate the amount of revenue required for Big Sky to break even.
0
Required A
Complete this question by entering your answers in the tabs below.
Required A Required B Required C
0
If sales increase by 15%, what will be the firm's operating income (or loss)?
Note: Do not round intermediate calculations.
< Required A
Break even
Required B >
a. Rearrange the preceding income statement to the contribution margin format.
b. If sales increase by 15%, what will be the firm's operating income (or loss)?
c. Calculate the amount of revenue required for Big Sky to break even.
Complete this question by entering your answers in the tabs below.
Calculate the amount of revenue required for Big Sky to break even.
< Required B
Required C >
Required C
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