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MousePad Computer Company, in addition to its retail sales, conducts night classes in computer...

Question:

MousePad Computer Company, in addition to its retail sales, conducts night classes in computer technology.

MousePad has provided you the following information :

Number of students 120
Revenue per student $450
Student-related variable costs $100 per student
Salary for three instructors $1,800 each
Administrative costs $30 per student
Maintenance on building $15,000 per year

Construct a Contribtuion margin format income statement.

Contribution format income statement:

Income statement refers to the statement prepared to highlight the sales and the expenses to arrive at the income. In case of contribution format income statement all expenses are divided into fixed and variable expenses.

Answer and Explanation: 1

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The contribution format income statement is as folllows:

Sales = 450 x 120 = $54,000.00

Less: Variable Costs:

Student related = 100 x 120 =...

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Creating Contribution Margin Income Statements

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Chapter 8 / Lesson 10
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Contribution margin income statements subtract fixed costs from total sales to give a picture of how much is available for spending. Learn how these statements are produced, their importance to budgeting, and what distinguishes them from regular income statements.


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