Reference no: EM132577608
Preparing and evaluating a contribution income statement
Problem a) You are an external consultant, and providing consultancy services to VanServ Inc.. Below you will see some financial information for 2019. The owner of the company asked you to prepare contribution income statement.
Problem b) Manager of the company has also a bonus plan (2% of the controllable contribution margin for the year is to be paid as yearly bonus). You are also asked to calculate the bonus. The contract of the manager will be renewed next year, so the owner is also wondering if you have any recommendation to improve calculation of the manager's bonus entitlement plan?
Total sales $ 57,300,000
Traceable, controllable, fixed costs 13,250,000 Traceable, uncontrollable, fixed costs 5,600,000
Non-traceable, controllable, fixed costs 2,500,000
Non-traceable, uncontrollable, fixed costs 3,250,000
Variable selling, general, & administrative costs 11,250,000
Variable product costs 22,800,000