China Imports Inc. sold 7,500 units in May. Per unit selling price and variable expense were $18 and $10, respectively. Fixed expense incurred for May totaled $46,000. Required: Prepare the May income statement for China Imports in the contribution margin format.

Question

Business

Delilah Tyler

29 December, 04:11

China Imports Inc. sold 7,500 units in May. Per unit selling price and variable expense were $18 and $10, respectively. Fixed expense incurred for May totaled $46,000. Required: Prepare the May income statement for China Imports in the contribution margin format.

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Allison Conley · Answer 1

The preparation is presented below:

Explanation:

The preparation of the income statement for China Imports in the contribution margin format is shown below

Sales (7,500 units * $18) $135,000

Less: Variable cost (7,500 units * $10) ($75,000)

Contribution margin $60,000

Less: Fixed expenses per month (46,000)

Net operating income $14,000