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Presented here is the income statement for Big Sky Incorporated for the month of February:...

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Accounting

Presented here is the income statement for Big Sky Incorporated for the month of February:

Sales $ 61,500
Cost of goods sold 50,500
Gross profit $ 11,000
Operating expenses 14,900
Operating loss $ (3,900)

Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 18%.

Required:

  1. Rearrange the preceding income statement to the contribution margin format.
  2. If sales increase by 15%, what will be the firm's operating income (or loss)?
  3. Calculate the amount of revenue required for Big Sky to break even.
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