Problem: Prepare a contribution margin format income statement-calculate break-even point. Presented here is the income statement for Pace. Co. for August:
Sales $100,000.00
Cost of Goods Sold $54,000.00
Gross Profit $46,000.00
Operating Expenses $37,000.00
Operating Income $9,000.00
Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 30%.
Required:
a. Rearrange the preceding income statement to the contribution margin format.
b. Calculate operating income if sales volume increases by 10%.
(Note: Do not construct an income statement to get your answer.)
c. Calculate the amount of revenue required for Pace to break even.