Global Travel uses the contribution margin income statement internally, Globai\'
ID: 2399331 • Letter: G
Question
Global Travel uses the contribution margin income statement internally, Globai's first quarter results are as ncome statement internally. Global's first quarter results are as follows: (Click the icon to view the income statement) Data Table at sales levels of $180,000 and $480,000. (Hint: Use the contribution margin ratio.) 180,000 levet (Round the variable expense rate to the nearest whole percent Enter losses with Global Travel Contribution Margin Income Statement Three Months Ended March 31 $400.000 120,000 Sales revenue Less: Variable expenses Contribution margn Less: Fixed expensen Operating income S 280,000 170,800 S109 200 PrintDone variabio expense rate to the neareet whole percent Enter losses with a minusExplanation / Answer
Answers
A
Contribution margin
$ 280,000.00
B
Sales Revenue
$ 400,000.00
C=(A/B) x 100
Contribution margin ratio
70%
Working
Sale Level $ 180,000
Sale Level $ 480,000
A [given]
Sales Revenue
$ 180,000.00
$ 480,000.00
B = A x (100% - Contribution ratio) = A x 30%
Less: Variable Expenses
$ 54,000.00
$ 144,000.00
C = A x Contribution ratio = A x 30%
Contribution margin
$ 126,000.00
$ 336,000.00
D
Less: Fixed Expenses
$ 170,800.00
$ 170,800.00
E
Operating Income (Loss)
$ (44,800.00)
$ 165,200.00
Break Even Sales in Dollars = Fixed Expenses / Contribution Margin ratio
(Fixed Expenses + $0 Net Operating Income) / Contribution margin ratio = Break Even Sales in Dollars
($ 170,800 + $0) / 70%
=
$ 244,000
The break Even Sales in Dollars
$ 244,000
A
Contribution margin
$ 280,000.00
B
Sales Revenue
$ 400,000.00
C=(A/B) x 100
Contribution margin ratio
70%
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