Carbex, Inc., produces cutlery sets out of high-quality wood and steel. The company makes a Standard...

4.5 Ratings (944 Votes)

1a)

CONTRIBUTION INCOME STATEMENT FOR THE MONTH OF APRIL

	Standard	%	Deluxe	%	Total	%
Sales	$ 475,200.00	100.00%	$ 350,200.00	100%	$ 825,400.00	100.00%
Variable Cost	$ 294,408.00	61.95%	$ 251,158.00	71.72%	$ 545,566.00	66.10%
Contribution Margin	$ 180,792.00	38.05%	$ 99,042.00	28.28%	$ 279,834.00	33.90%
Fixed Cost					$ 214,900.00
Operating Income					$ 64,934.00

1b)

CONTRIBUTION INCOME STATEMENT FOR THE MONTH OF MAY

	Standard	%	Deluxe	%	Total	%
Sales	$ 211,200.00	100.00%	$ 659,200.00	100%	$ 870,400.00	100.00%
Variable Cost	$ 130,848.00	61.95%	$ 472,768.00	71.72%	$ 603,616.00	69.35%
Contribution Margin	$ 80,352.00	38.05%	$ 186,432.00	28.28%	$ 266,784.00	30.65%
Fixed Cost					$ 214,900.00
Operating Income					$ 51,884.00

3a) Break even sales in dollars= Fixed cost/Contribution Margin ratio

=214,900/33.90%

=633,870.29

3b)Break even point for the month of may will be higher than the April as contribution margin in may is lower than the April

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	Standard		Deluxe
Variable production costs	$	29.00	$	44.00
Sales commissions (29% of sales price)	$	25.52	$	29.87

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