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During its most recent fiscal year, Dover, Inc. had total sales of $3,160,000. Contribution margin amounted to $1,480,000 and pretax income was $370,000. What amount should have been reported as variable costs in the company's contribution margin income statement for the year

Sagot :

The company's contribution margin income statement for the year $1,105,000.

Contribution margin income

A contribution margin income statement is an income statement in which all variable expenses are deducted from sales to arrive at a contribution margin. Then, all fixed expenses are subtracted to arrive at the net profit or net loss for the period.

How do you calculate contribution margin income?

Calculate the operating income by subtracting your total fixed costs from the contribution margin, as they both appear on the contribution income statement. For example, if you have a contribution margin of $30,000 and fixed costs of $5,000, then you would have an operating income of $25,000.

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