Problem:
Gross Margin and Contribution Margin Income Statements
Tosca Beverages reports the following information for July:
Units produced and sold 18,800
Per unit revenue and costs:
Sales revenue. $3.20
Direct material costs 0.20
Direct labor costs 0.16
Variable manufacturing overhead 0.06
Fixed manufacturing overhead based
on a volume of 18,800 units 0.92
Variable marketing and administrative costs 0.48
Fixed marketing and administrative costs
Based on a volume of 18,800 units 1.00
Required
Prepare:
a) A gross margin income statement.
b) A Contribution margin income statement.
Please note the difference in unit produced and sold