Zhao Co. has fixed costs of $354,000. Its single product sells for $175 per unit, and variable costs are $116 per unit. The company expects sales of 10,000 units. Prepare a contribution margin income statement for the year ended December 31, 2019.

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Business

Ivy Norris

11 May, 13:35

Zhao Co. has fixed costs of $354,000. Its single product sells for $175 per unit, and variable costs are $116 per unit. The company expects sales of 10,000 units. Prepare a contribution margin income statement for the year ended December 31, 2019.

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Raina Walls · Answer 1

Contribution margin income statement for the year ended December 31, 2019

Sales (10,000*$175) 1,750,000

Less Variable Costs (10,000*$116) (1,160,000)

Contribution 590,000

Less Fixed Costs (354,000)

Net Income / (loss) 236,000

Explanation:

Variable Costing Income = Contribution - Fixed Costs