Monthly Contribution Format Income Statement

How do you calculate interest expense for an income statement.

Monthly contribution format income statement. Sales 44 000 units 22 per unit 968 000. The company s most recent monthly contribution format income statement follows. Compute the company s degree of operating leverage. A contribution margin income statement on the other hand is a purely management oriented format of presenting revenues and expenses that helps in various revenues and expense related decision making processes.

Prepare a contribution format income statement segmented by geographic market as requested by the president. Using the degree of operating. Whirly corporation s contribution format income statement for the most recent month is shown below. Contribution margin income statement format.

The interest expense formula is. Every dollar of revenue generated goes into either of contribution margin or variable costs. Exercise 6 11 segmented income statement lo6 4 wingate company a wholesale distributor of electronic equipment has been experiencing losses for some time as shown by its most recent monthly contribution format income statement which follows. Lucky products markets two computer games.

A contribution format income statement for a recent month for the two games appears below. Sales 1 000 000 variable expenses 390 000 contribution margin 610 000 fixed expenses 625 000 net operating. Calculating your contribution margin income. The company s sales manager believes that sales in the central geographic market could be increased by 10 if monthly advertising is increased by 32 000.

Total per unit sales 10 000 units 350 000 35 00 variable expenses 200 000 20 00 contribution margin 150 000 15 00 fixed. Unlike a traditional income statement the expenses are bifurcated based on how the cost behaves. Principal outstanding on the loan x annual interest rate x time period interest expense where is bad debt expense reported. Morton company s contribution format income statement for last month is given below.

Net product revenue sales total variable costs product revenue for example if your product revenue was 500 000 and total variable expenses were 250 000 your contribution margin would be 250 000 500 000 or 50. What s left in contribution margin goes in covering fixed costs and remaining into the net profit loss.