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Prepare a projected contribution type income statement

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Reference no: EM133074769

Question - Part A - Newton Cellular manufactures and sells the Top Line cellphone. For the year 2022 Newton has estimated the following:

Contribution margin per phone $200

Variable cost per cell phone $450

Annual fixed costs - Total $180,000

Net loss ($400)

Required - Prepare a projected contribution type income statement based on the 2022 estimates.

Compute the break-even in units and in sales dollars for 2022.

How many units is Newton planning to sell in 2022?

How many additional units must be sold in 2022 to break-even?

How many units need to be sold to earn $100,000 before tax?

Part B - Given:

Variable cost as a % of sales 70%

Annual fixed costs - Total $600,000

Required - What is the contribution margin ratio?

What is the break-even point in sales dollars?

If the company is operating at a $100,000 loss what are the dollar sales?

If the company is operating at a $100,000 profit what are the dollar sales?

Reference no: EM133074769

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