Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger

Exercise 65

Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio
Silberg Company's controller prepared the following budgeted income statement for the coming year:
Required:
1. What is Silberg's variable cost ratio What is its contribution margin ratio
2. Suppose Silberg's actual revenues are $30,000 more than budgeted. By how much will operating income increase Give the answer without preparing a new income statement.
3. How much sales revenue must Silberg earn to break even Prepare a contribution margin income statement to verify the accuracy of your answer.
4. What is Silberg's expected margin of safety
5. What is Silberg's margin of safety if sales revenue is $380,000