Provided below is the financial data for Smooth Operators a

Provided below is the financial data for Smooth Operators, a company that produces cleaning buckets and cleaning mops: Sales Variable Costs Contribution margin Fixed costs Net operating income Cleaning Buckets 120,000 81,600 38,400 Cleaning Mops 62,000 35,960 26,040 Total 182,000 117,560 64,440 28,440 Required: Construct a contribution format income statement at the break-even level of sales, showing th information for each product as well as the company as a whole. Note: For best mathematical accuracy, do not round off your interim calculations, but only round your final answers. e financial

Solution

Contibution format income statement Cleaning buckets Cleaning mops Total Sales 67039 34637 101676 Variable costs 45587 20089 65676 Contribution margin 21453 14547 36000 Fixed costs 36000 Net operating income 0 Workings: Sales mix: Cleaning buckets 65.9341% =120000/182000 Cleaning mops 34.0659% =62000/182000 Contribution margin ratio: Cleaning buckets 32% =38400/120000 Cleaning mops 42% =26040/62000 Weighted Contribution margin ratio=(65.9341%*32%)+(34.0659%*42%)= 35.4066% Fixed costs =64440-28440= 36000 Break even sales = 36000/35.4066%= 101676