Scribd
Upload
24 views

The Contribution Format Income Statement Can Be Expressed in The Following Equation

The document expresses the contribution format income statement using an equation where profit equals sales minus variable expenses minus fixed expenses. It provides an example income statement for a bicycle company in June with sales of $200,500, variable expenses of $120,300, contribution margin of $80,200, fixed expenses of $80,000, and net operating income of $200. Exercises 5-1, 5-2, 5-3, and 5-13 from the managerial accounting textbook are recommended to practice computations using the contribution margin equation without graphs.

Uploaded by

Sakiful Islam
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
24 views

The Contribution Format Income Statement Can Be Expressed in The Following Equation

The document expresses the contribution format income statement using an equation where profit equals sales minus variable expenses minus fixed expenses. It provides an example income statement for a bicycle company in June with sales of $200,500, variable expenses of $120,300, contribution margin of $80,200, fixed expenses of $80,000, and net operating income of $200. Exercises 5-1, 5-2, 5-3, and 5-13 from the managerial accounting textbook are recommended to practice computations using the contribution margin equation without graphs.

Uploaded by

Sakiful Islam
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

CVP Relationships in Equation Form

The contribution format income statement can be expressed in the following


equation:

Profit = (Sales – Variable Expenses) – Fixed Expenses

Racing Bicycle Company


Contribution Income Statement
For the Month of June
Total Per Unit
Sales (401 bicycles) $ 200,500 $ 500
Less: Variable expenses 120,300 300
Contribution margin 80,200 $ 200
Less: Fixed expenses 80,000
Net operating income $ 200

1
2
Exercise: 5-1, 5-2 (1 – only computations using CM equation, no graphs
required), 5-3 (1 – only computations using CM equation, no graphs required),
5-13.
Core Reading/Textbook:

Garrison, Ray, H., Noreen, Eric, W., & Brewer, Peter, C. (2015). Managerial Accounting.
[15th Edition]. The McGraw-Hill, New York, USA.

You might also like