Ask Question
6 March, 17:32

Mechem Corporation produces and sells a single product. In April, the company sold 2,000 units. Its total sales were $163,000, its total variable expenses were $80,900, and its total fixed expenses were $57,800. Required: a. Construt. a. Construct the company's contribution format income statement for October. (Do not round intermediate calculations. Omit the "$" sign in your response.) b. Redo the company's contribution format income statement assuming that the company sells 1,900 units. (Do not round intermediate calculations. Omit the "$" sign in your response.)

+4
Answers (1)
  1. 6 March, 18:52
    0
    Instructions are listed below.

    Explanation:

    Giving the following information:

    The company sold 2,000 units.

    Total sales were $163,000

    Total variable expenses were $80,900

    Total fixed expenses were $57,800.

    The contribution margin income statement follows this structure:

    Income statement:

    Sales

    -Total variable cost

    = contribution margin

    -fixed costs

    = net operating income

    1) Income statement

    Sales = 163,000

    Total variable cost = (80,900)

    Contribution margin = 82,100

    Total fixed costs = (57,800)

    Net operating income = 24,300

    2) First, we need to calculate the unitary selling price and unitary variable cost:

    Selling price = 163,000/2,000=$81.5

    Unitary variable cost = 80,900/2,000 = $40.45

    Sales = 1,900*81.5 = $154,850

    Total variable cost = (1,900*40.45) = (76,855)

    Total contribution margin = 77,995

    Total fixed cost = (57,800)

    Net operating income = 20,195
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Mechem Corporation produces and sells a single product. In April, the company sold 2,000 units. Its total sales were $163,000, its total ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers