Problem:
Betty DeRose, Inc. prepared the following projected income statement information for 2011:
Contribution margin .............. $900,000
Fixed costs ...................... 780,000
Net income ....................... 120,000
Required:
Question 1: Assume that actual sales in 2011 were 20% higher than projected.
Question 2: Calculate the net income earned by Betty DeRose, Inc. for 2011.
Note: Provide support for your rationale.