Cost volume profit analysis of managerial accounting Alden company prepared the following budget inc
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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
Required:
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?
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