Andres Napkin Company sells a product for 80 per unit Variab

Andres Napkin Company sells a product for $80 per unit. Variable costs are $25 per unit, and fixed costs are $4,000 per month. Andres sold 2,000 units in October. Prepare an income statement for October using the contribution margin format.

Solution

Total revenue = 2000*80 = 160000

variable cost = 2000*25 - 50000

contribution = total revenue - variable cost = 110000