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2 December, 17:56

QS 18-12 Contribution margin income statement LO P2 Zhao Co. has fixed costs of $286,200. Its single product sells for $163 per unit, and variable costs are $110 per unit. The company expects sales of 10,000 units. Prepare a contribution margin income statement for the year ended December 31, 2017.

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  1. 2 December, 21:19
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    Instructions are below.

    Explanation:

    Giving the following information:

    Total fixed costs of $286,200.

    Its single product sells for $163 per unit.

    Unitary variable cost = $110 per unit. The company expects sales of 10,000 units.

    Contribution margin income statement:

    Sales = (10,000*163) = 1,630,000

    Variable costs = (10,000*110) = (1,100,000)

    Contribution margin = 530,000

    Fixed costs = (286,200)

    Net operating income = 243,800
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