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1. A condensed income statement for Tramco follows: (amounts are in thousands of

ID: 2504457 • Letter: 1

Question

1.     A condensed income statement for Tramco follows: (amounts are in thousands of dollars)

Products

Sales (total)

$200

$180

$320

$700

Unit-level Variable Cost (total)

(120)

(160)

(200)

(480)

Contribution Margin

80

20

120

220

Facility-Level Fixed Cost

(25)

(30)

(40)

(95)

Income (Loss)

$ 55

$(10)

$ 80

$125

Tramco

Products

F

G

H

Total

Sales (total)

$200

$180

$320

$700

Unit-level Variable Cost (total)

(120)

(160)

(200)

(480)

Contribution Margin

80

20

120

220

Facility-Level Fixed Cost

(25)

(30)

(40)

(95)

Income (Loss)

$ 55

$(10)

$ 80

$125

Explanation / Answer

New income



Change in income= 105000-125000 = -20,000


c.     $20,000 decrease

Products F G H Total Sales (total) $200 $0 $320 $520 Unit-level Variable Cost (total) -120 0 -200 ($320) Contribution Margin 80 0 120 $200 Facility-Level Fixed Cost -25 -30 -40 ($95) Income (Loss) $55 ($30) $80 $105