Spencer Company's most recent monthly contribution format income statement is given below:

The company sells its only product for $10 per unit. There were no beginning or ending inventories.

Required:

a) What are total sales in dollars at the break-even point?
b) What are total variable expenses at the break-even point?
c) What is the company's contribution margin ratio?
d) If unit sales were increased by 10% and fixed expenses were reduced by $2,000, what would be the company's expected operating income? (Prepare a new income statement.)

Question

Spencer Company's most recent monthly contribution format income statement is given below:

The company sells its only product for $10 per unit. There were no beginning or ending inventories.

Required:

a) What are total sales in dollars at the break-even point?
b) What are total variable expenses at the break-even point?
c) What is the company's contribution margin ratio?
d) If unit sales were increased by 10% and fixed expenses were reduced by $2,000, what would be the company's expected operating income? (Prepare a new income statement.)

Quizplus · Accepted Answer

The Answer of Spencer Company's most recent monthly contribution format income statement is given below:

The company sells its only product for $10 per unit. There were no beginning or ending inventories.

Required:

a) What are total sales in dollars at the break-even point?
b) What are total variable expenses at the break-even point?
c) What is the company's contribution margin ratio?
d) If unit sales were increased by 10% and fixed expenses were reduced by $2,000, what would be the company's expected operating income? (Prepare a new income statement.)

Spencer Company's Most Recent Monthly Contribution Format Income Statement Is