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Prepare contribution margin income statement in good form

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Question - Cats'R Us sells a single product. 8,000 units were sold resulting in $80,000 of sales revenue; $20,000 of variable costs; and $10,000 of fixed costs.

Calculate the following:

1. Unit Contribution Margin

2. CM Ratio

3. Break-even point units.

4. Break-even sales dollars

5. How many units must be sold to earn $100,000 in target operating income?

6. What is their degree of operating leverage when they sell 8,000 units?

7. What is their margin of safety in dollars when they sell 8,000 units?

8. Assume the company sells 5,000 units. Prepare contribution margin income statement in good form.

Reference no: EM132639308

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