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21 June, 17:36

Zhao Co. has fixed costs of $354,000. Its single product sells for $175 per unit, and variable costs are $116 per unit. The company expects sales of 10,000 units. Prepare a contribution margin income statement for the year ended December 31, 2019.

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  1. 21 June, 17:44
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    Contribution margin income statement for the year ended December 31, 2019

    Sales (10,000*$175) 1,750,000

    Less Variable Costs (10,000*$116) (1,160,000)

    Contribution 590,000

    Less Fixed Costs (354,000)

    Net Income / (loss) 236,000

    Explanation:

    Variable Costing Income = Contribution - Fixed Costs
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