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How to make a contribution margin income statement

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Reference no: EM132657346

Assume that you are part of the accounting team for Epstein Hardware. The company has only one product that sells for $40 per unit. Epstein estimates total fixed costs to be $9,500. Epstein estimates direct materials cost of $4.80 per unit, direct labor costs of $6.00 per unit, and variable overhead costs of $1.20 per unit. The CEO would like to see what the gross margin and operating income will be if 500 units are sold in the next period.

Problem 1: Prepare a contribution margin income statement.

Epstein Hardware

Contribution margin

$Less: Fixed costs

Operating income$

Reference no: EM132657346

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