THE CONTROLLER OF KERRISK COMPANY PREPARED THE FOLLOWING PROJECTED INCOME STATEMENT:
SALES (5,000 UNITS @ $15) $75,000
LESS: VARIABLE COSTS 60,000
CONTRIBUTION MARGIN 15,000
LESS: FIXED COSTS 10,350
OPERATING INCOME 4,650
REQUIRED:
1. WHAT IS THE CONTRIBUTION MARGIN PER UNIT FOR KERRISK COMPANY? WHAT IS THE CONTRIBUTION MARGIN RATIO?
2. WHAT IS THE VARIABLE COST RATIO FOR KERRISK COMPANY?
3. CALCULATE THE BREAK- EVEN REVENUE.
4. HOW MUCH REVENUE MUST KERRISK MAKE TO ERAN OPERATING INCOME EQUAL TO $9,900?
THE CONTROLLER OF KERRISK COMPANY PREPARED THE FOLLOWING PROJECTED INCOME STATEMENT:
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