(Answered) Question - presented below is the income statement for

Accounting

Question - Presented below is the income statement for Ackee Food Center for the month of July:

Sales 1,280,000

Cost of Goods Sold 1,180,000

Gross Profit 100,000

Operating Expense 64,000

Operating Income 36,000

Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 15 percent.

(a) Rearrange the above income statement to the contribution margin format.

(b) If sales increase by 10 percent, what will be the firm's operating income?

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