Calculating contribution margin ratio, preparing contribution margin income statementsFor its top managers, Worldwide Travel Formats its income statement as follows:Worldwide’s relevant range is between sales of $253,000 and $368,000.RequirementsCalculate the contribution margin ratio.Prepare two contribution margin income statements: one at the $253,000 sales level and one at the $368,000 sales level. (Hint: The proportion of each sales dollar that goes toward variable costs is constant within the relevant range.) WORLDWIDE TRAVELContribution Margin Income StatementThree Months Ended March 31, 2018Net Sales Revenue$ 316,500Variable Costs136,095Contribution Margin180,405Fixed Costs173,000Operating Income$ 7,405

Name: Calculating contribution margin ratio, preparing contribution margin i
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Description: Calculating contribution margin ratio, preparing contribution margin income statementsFor its top managers, Worldwide Travel Formats its income statement as follows:Worldwide’s relevant range is between sales of $253,000 and $368,000.RequirementsCalc

1. Variable costs = 100% - Contribution Margin ratio = 100% - 57% = 43%

Business

Accounting

WORLDWIDE TRAVEL Contribution Margin Income Statement Three Months Ended March 31, 2018 Net Sales Revenue $ 316,500 Variable Costs 136,095 Contribution Margin 180,405 Fixed Costs 173,000 Operating Income $ 7,405

WORLDWIDE TRAVEL Contribution Margin Income Statement Three Months Ended March 31, 2018 Net Sales Revenue $ 316,500 Variable Costs 136,095 Contribution Margin 180,405 Fixed Costs 173,000 Operating Income $ 7,405

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter13: Budgeting And Standard Costs

Section: Chapter Questions

Problem 13.6.3MBA

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