Mechem Corporation produces and sells a single product. In April, the company sold 2,000 units. Its total sales were $163,000, its total variable expenses were $80,900, and its total fixed expenses were $57,800. Required: a. Construt. a. Construct the company's contribution format income statement for October. (Do not round intermediate calculations. Omit the "$" sign in your response.) b. Redo the company's contribution format income statement assuming that the company sells 1,900 units. (Do not round intermediate calculations. Omit the "$" sign in your response.)

Instructions are listed below.

Explanation:

Giving the following information:

The company sold 2,000 units.

Total sales were $163,000

Total variable expenses were $80,900

Total fixed expenses were $57,800.

The contribution margin income statement follows this structure:

Income statement:

Sales

-Total variable cost

= contribution margin

-fixed costs

= net operating income

1) Income statement

Sales = 163,000

Total variable cost = (80,900)

Contribution margin = 82,100

Total fixed costs = (57,800)

Net operating income = 24,300

2) First, we need to calculate the unitary selling price and unitary variable cost:

Selling price = 163,000/2,000=$81.5

Unitary variable cost = 80,900/2,000 = $40.45

Sales = 1,900*81.5 = $154,850

Total variable cost = (1,900*40.45) = (76,855)

Total contribution margin = 77,995

Total fixed cost = (57,800)

Net operating income = 20,195