Purchase Solution

# Edwards Co. Contribution margin income statement breakeven

Not what you're looking for?

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%.
Required:
Show all calculations
a. Rearrange the preceding income statement to the contribution margin format.
b. Calculate operating income if sales volume increases by 20%.
c. Calculate the amount of revenue required for Edwards to break even.

##### 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.

##### Solution Preview

See excel attached.

Your tutorial creates a contribution margin ...

Solution provided by:
###### Education
• BSc, University of Virginia
• MSc, University of Virginia
• PhD, Georgia State University
###### Recent Feedback
• "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
• "Thank, this is more clear to me now."
• "Awesome job! "
• "ty"
• "Great Analysis, thank you so much"

##### Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

##### Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

##### Basics of corporate finance

These questions will test you on your knowledge of finance.

##### Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.