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Homework answers / question archive / Presented here is the income statement for Big Surf, Inc

Presented here is the income statement for Big Surf, Inc

Accounting

Presented here is the income statement for Big Surf, Inc., for the month of May:

 

 

 

 

  Sales

$

60,000

 

  Cost of goods sold

 

51,000

 

 


 


 


 

  Gross profit

$

9,000

 

  Operating expenses

 

15,100

 

 


 


 


 

  Operating loss

$

(6,100

)

 



 



 



 


 

 

Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 17%.

   

Required:

a.

Rearrange the preceding income statement to the contribution margin format.

 

 

 

b.

If sales increase by 15%, what will be the firm's operating income (or loss)? (Round your answer to the nearest whole dollar.)

     

 

c.

Calculate the amount of revenue required for Big Surf, Inc., to break even. (Round your answer to the nearest whole dollar.)

 

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