Presented Below Is the Income Statement for Ackee Food Center

question 47

Essay

Presented below is the income statement for Ackee Food Center for the month of July:
$\begin{array}{lrr}\text { Sales } & \$ 1,280,000 \\\text { Cost of goods sold } & \underline{ 1,180,000 }\\ \text { Gross profit } & \$ 100,000 \\\text { Operating expenses } & \underline{ 64,000} \\ \text { Operating income } & \underline{\$ 36,000} \\\end{array}$ Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 15 percent.
(a.)Rearrange the above income statement to the contribution margin format.
(b.)If sales increase by 10 percent, what will be the firm's operating income?
(c.)Calculate the amount of revenue required for Ackee's Food Center to break even.

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Definitions:

Latitudes

The measurement of distance north or south of the Earth's equator, typically expressed in degrees.

Hadley Cells

Atmospheric circulatory patterns between the equator and 30 degrees latitude in both hemispheres, characterized by rising warm air near the equator and sinking cool air in the subtropics.

Ocean Currents

Large scale movements of seawater that circulate the world's oceans, driven by factors such as wind, salinity, and temperature gradients.

Average Precipitation

The mean amount of rain, snow, sleet, or hail that falls in a region over a set period, usually measured in millimeters or inches.