Contribution Income Statement and Operating Leverage Florida Berry Basket harvests early-season strawberries for shipment throug

Question

3 years ago

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Contribution Income Statement and Operating Leverage Florida Berry Basket harvests early-season strawberries for shipment throug

hout the eastern United States in March. The strawberry farm is maintained by a permanent staff of 10 employees and seasonal workers who pick and pack the strawberries. The strawberries are sold in crates containing 100 individually packaged one-quart containers. Affixed to each one-quart container is the distinctive Florida Berry Basket logo inviting buyers to "Enjoy the berry best strawberries in the world!" The selling price is $100 per crate, variable costs are $70 per crate, and fixed costs are $271,000 per year. In the year 2008, Florida Berry Basket sold 45,000 crates.
Prepare a contribution income statement for the year ended December 31, 2008.

Business

2 answers:

Snowcat [4.5K] · Answer 1 · 2022-08-08T11:03:17+03:00

Answer:

Contribution margin = $1,350,000

Net Income = $1,079,000

Explanation:

Sales = 45,000 * $100 = $4,500,000

Variable cost = 45,000 * $70 = $3,150,000

Fixed cost = $271,000

Florida Berry Basket

Contribution Income Statement

For the year ended December 31, 2008

Details Amount ($)

Sales 4,500,000

Variable cost (3,150,000)

Contribution margin 1,350,000

Fixed cost (271,000)

Net Income  1,079,000 

natta225 [31] · Answer 2 · 2022-08-08T09:06:37+03:00

Answer:

Net income = $1,079,000

Explanation:

As per the data given in the question,

Income statement for year ended December 31,2008:

Particulars Value Workings

Sales $4,500,000 ($45,000 × $100)

Variable cost $3,150,000 ($45,000 × $70)

Contribution margin $1,350,000 ($4,500,000 - $3,150,000)

Fixed cost $271,000

Net Income $1,079,000 ($1,350,000 - $271,000)