Cost volume profit analysis of managerial accounting
Alden company prepared the following budget income statement for the coming year
Sales revenue $ 515000
Total variable cost 402950
Contribution Margin 112050
Total Fixed costs 64,800
Operating income 47250
1, What is Alden’s variable cost ratio? What is its contribution margin ratio?
2, suppose Alden’s actual revenues are $35000 more than budgeted By how much will operating income increase? Give the answer without preparing a new income statement
3, How much sales revenue must Alden earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer
4, What is Alden’s expected margin of safety?
5, What is Alden’s margin of safety if sales revenue is $380000?