Need help to properly format a contribution margin income statement.
Contribution Margin Income Statement
For the Quarter Ending March 31, 2011
Sales (25,000 units x $100) 2,500,000
Variable manufacturing expenses 1,562,000
Gross Contribution Margin 938,000
Less Variable marketing and admin expenses 625,000
Contribution Margin 438,000
Less fixed costs: 500,000
Net Income: -187,000
The proper format is:
Sales - Variable manufacturing costs = Gross contribution margin ...
The solution provides an explanation as to the correct format for a contribution margin income statement. References are also provided.