CVP Analysis - BEP
Prepare a contribution margin format income statement; calculate break-even point: Presented here is the income statement for Edwards Co. For February:
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Sales...............
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$80,000
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Cost of goods sold..............
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$48,000
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Gross profit........
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$32,000
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Operating expenses.............
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$21,200
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Operating income ...............
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$10,800
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Required:
a. Rearrange the preceding income statement to the contribution margin format.
b. Calculate operating income if sales volume increases by 20%. (note: Do not construct an income statement to get your answer.)
c. Calculate the amount of revenue required for Edwards to break even