Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 2

Prepare a contribution margin format income statement; calculate breakeven point Presented here is the income statement for Fairchild Co. for March:

Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 30%.
Required:
a. Rearrange the preceding income statement to the contribution margin format.
b. Calculate operating income if sales volume increases by 8%. (Note: Do not construct an income statement to get your answer.)c. Calculate the amount of revenue required for Fairchild to break even.