Description of this paper

Western Travel uses the contribution margin income...

Description

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Question

Western Travel uses the contribution margin income statement internally. Western's first-quarter results are as follows: Western Travel Contribution Margin Income Statement Three Months Ended March 31 Sales Revenue--------------------------------------------------------------------------$500,000 Less: Variable expenses--------------------------------------------------------------100,000 Contribution margin-----------------------------------------------------------------$400,000 Less: Fixed expenses------------------------------------------------------------------174,000 Operating income-------------------------------------------------------------------- $226,000 Western's relevant range is sales of between $100,000 and $700,000. Question #1) Prepare contribution margin income statements at sales levels of $255,000 and $363,000. (Hint use contribution margin ratio.) Question #2) Compute breakeven sales in dollars.

 

Paper#11080 | Written in 18-Jul-2015

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