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Home / Questions / For its top managers Aussie Travel formats its income statement as follows

For its top managers Aussie Travel formats its income statement as follows

For its top managers, Aussie Travel formats its income statement as follows:

Aussie Travel

Contribution Margin Income Statement

Three Months Ended March 31, 2016

 

Net Sales Revenue

$318,500

 

Variable Costs

111,475

 

Contribution Margin

207,025

 

Fixed Costs

175,000

 

Operating Income

$32,025

Aussie's relevant range is between sales of $245,000 and $370,000.

Requirements:

1. Calculate the contribution margin ratio.

2. Prepare the two contribution margin income statements: one at the $245,000 sales level and one at the $370,000 sales level. (Hint: The proportion of each sales dollar that goes toward variable costs is constant within the relevant range.)

Feb 06 2020 View more View Less

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