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				CROSSLEY COMPANY
				INCOME STATEMENT
				YEAR ENDED DECEMBER 31, 2018
		QTR 1	QTR 2	QTR 3	QTR 4		YEAR
Sales revenue
LESS: Variable costs
Direct materials
Direct labor
Variable overhead
Variable selling
Total variable costs
Contribution margin
LESS: Fixed costs
Fixed overhead-depreciation
Fixed overhead-other
Fixed selling-depreciation
Fixed selling-other
Fixed admin-depreciation
Fixed admin-other
Total fixed costs
Operating income

Prepare a budgeted income statement through operating income by quarter and for the year using the contribution margin format--use the format provided on the template as a reference. Then add interest expense to your income statement to determine income before tax. Interest expense can be calculated from the information provided for the cash budget. (For purposes of this project, we will ignore income taxes.)

Using your budgeted income statement for the year, answer the following questions at the bottom of your income statement sheet. You should use operating income in your calculations, not income before tax. Label your answers, but make sure that your answers contain formulas incorporating cell references.

What is the budgeted break-even point in units? (Round to the nearest whole unit)

What is the margin of safety percentage at the budgeted activity level for the year? (Round to the nearest one percent)

What is operating leverage at the budgeted activity level for the year? (Round to one decimal place)

If Crossley wants to earn a $5,500,000 operating profit next year, how many units must the company sell? (Round to the nearest whole unit)

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