Prepare a contribution margin format income statement; answer what-if questions Shown here is an income statement in the traditional format for a firm with a sales volume of 10,000 units. Cost formulas also are shown:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50,000
Cost of goods sold ($9,000 ? $2.60/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000
Gross pro? t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,000
Operating expenses:
Selling ($2,300 ? $.1 5/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,800
Administration ($4,700 ? $.25/unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,200
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,000

Required:
a. Prepare an income statement in the contribution margin format.
b. Calculate the contribution margin per unit and the contribution margin ratio.