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Prepare two contribution margin income statements

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Preparing contribution margin income statements and calculating breakeven sales

For its top managers, Worldwide Travel formats its income statement as follows:

WORLDWIDE TRAVEL Contribution Margin Income Statement Three Months Ended March 31, 2012

Sales revenue

$ 317,500

Variable costs

95,250

Contribution margin

$ 222,250

Fixed costs

175,000

Operating income

$ 47,250

Worldwide's relevant range is between sales of $245,000 and $364,000.

Requirements

1. Calculate the contribution margin ratio.

2. Prepare two contribution margin income statements: one at the $245,000 leveland one at the $364,000 level.

3. Compute breakeven sales in dollars.

Reference no: EM13527368

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