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    Prepare income statement in the contribution margin format

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    Shown below is an income statement in the traditional format for a firm with a sales volume of 20,000 units.

    Revenues $160,000
    Cost of goods sold ($16,000 + $3.20/unit) 80,000
    Gross profit $80,000
    Operating expenses:
    Selling ($4,500 + $1.40/unit) 32,500
    Administration ($7,500 + $1.00/unit) 27,500
    Operating income $20,000

    Please proceed to the "Analysis" worksheet and complete the basic problem requirements. Complete the problem
    requirements by entering appropriate amounts or formulas in shaded worksheet cells:

    a. Prepare an income statement in the contribution margin format.
    b. Calculate the contribution margin per unit and the contribution margin ratio.

    After completing the "Analysis" worksheet, please proceed to the "What the Numbers Mean" worksheet and respond
    to the additional problem requirements.

    Work in Process Finished Goods Cost of Goods Sold
    Beginning Inventory (BI): 0 BI: 0
    Raw Material Used: - CGM - - CGS -
    Direct Labor Cost:
    Manufacturing Overhead: EI:

    Ending Inventory (EI): 0

    Cost of goods manufactured: $-
    Number of units produced: Number of units sold:

    Cost per unit:

    Complete the Modeling:
    Gravois Inc.
    Income Statement
    For the Month of June

    Cost of goods sold
    Gross profit
    Selling and administrative expenses
    Operating income
    Interest expense
    Income before taxes
    Income tax expense (35%)
    Net income

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    Solution Summary

    Your two excel spreadsheet are completed using formulas (click in cells to see computation) so you can figure out how I got each of the amounts. A discussion is provided to analyze what the numbers means.