Problem
Contribution Margin. I am a math disorder and seeing the steps will help me understand it.
#1 Selling Price $500/Unit
Total Expenses for Month: $500,000
Units Sold this month: 1000
Prepare a traditional income statement to calculate operating income or loss
#2 Assume same data in #1. Total Expenses, $200,00 are fixed and the rest are Variable
Prepare a CM income statement fo rthe volumn of sales (1000 units). Include selling Price, VC and CM per unit amounts and totals.
#3 Using the CM Income STatement form #2. If compmany sells one additional unit (at the same selling price), how much will CM $ increase (total)? How much will operating income increase (total)?