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    Edwards Co. Contribution margin income statement breakeven

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    Prepare a contribution margin format income statement-calculate break-even point. Presented here is the income statement for Edwards Co. for February.
    Sales $80,000
    Cost of Goods Sold $48,000
    Gross Profit $32,000
    Operating Expenses $21,000
    Operating Income $10,800
    Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 35%.
    Show all calculations
    a. Rearrange the preceding income statement to the contribution margin format.
    b. Calculate operating income if sales volume increases by 20%.
    (Note: Do not construct an income statement to get your answer.)
    c. Calculate the amount of revenue required for Edwards to break even.

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    Solution Preview

    See excel attached.

    Your tutorial creates a contribution margin ...

    Solution Summary

    See excel attached.

    Your tutorial creates a contribution margin income statement (click in cells to see computation in Excel). The revised profit is computed and then shown as a proof in financial statement format. Breakeven is computed for you showing you the formula and then the answer.