Mary Smith sells gourmet chocolate chip cookies. The results of her last month of operations are as follows:
|
Sales revenue |
|
|
Cost of goods sold (all variable) |
25,575 |
|
Gross margin |
|
|
Selling expenses (20% variable) |
8,000 |
|
Administrative expenses (60% variable) |
12,000 |
|
Operating income |
$ 4,425 |
Required
- Prepare a contribution format income statement for Mary.
- If Mary sells her cookies for $1.60 each, how many cookies did she sell during the month?
- What is the contribution margin per cookie?
- What is Mary”s contribution margin ratio?