Question

Zhao Co. has fixed costs of $390,600. Its single product sells for $181 per unit, and variable costs are $119 per unit. The company expects sales of 10,000 units. Prepare a contribution margin income statement for the year ended December 31, 2017.

Answer 1

Answer:

Explanation:

The preparation of the contribution margin income statement for  the year ended December 31, 2017 is presented below:

Sales (10,000 units × $181)                              $1,810,000

Less: Variable cost (10,000 units × $119)       ($1,190,000)

Contribution margin                                        $620,000

Less: Fixed cost                                               ($390,600)

Net income                                                      $229,400