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1) Danner Company expects to have a cash balance of $60,435 on January 1, 2017

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1) Danner Company expects to have a cash balance of $60,435 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows. 
Collections from customers: January $114,155, February $201,750. Payments for direct materials: January $67,150, February $100,725. Direct labor: January $40,290, February $60,435. Wages are paid in the month they are incurred. Manufacturing overhead: January $28,203, February $33,575. These costs include depreciation of $2,017 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $20,175, February $26,863. These costs are exclusive of depreciation. They are paid as incurred. 
Sales of marketable securities in January are expected to realize $16,116 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $33,575. The company wants to maintain a minimum monthly cash balance of $26,860. 
Prepare a cash budget for January and February. 
 

2) 

Contribution Margin Income Statement. Last month Kumar Production Company sold its product for $60 per unit. Fixed production costs were $40,000, and variable production costs amounted to $15 per unit. Fixed selling and administrative costs totaled $26,000, and variable selling and administrative costs amounted to $5 per unit. Kumar Production produced and sold 7,000 units last month. Required:

1.    traditional income statement for Kumar Production Company.

2.    contribution margin income statement for Kumar Production Company.

3.    Why do companies use the contribution margin income statement format?