The Friday Company had the following functional income statement for the month of January: 40,000 units sold. Sales $400,000 Cost of goods sold: Direct materials $100,000 Direct labor 40,000 Variable factory overhead 120,000 Fixed factory overhead 26,000 286,000 Gross profit $114,000 Selling and administrative expenses: Variable $24,000 Fixed 24,000 48,000 Net income $66,000 There were no beginning and ending inventories. REQUIRED a. Prepare a contribution margin income statement. Note: Do not use a negative sign. Friday Company Contribution Margin Income Statement For the Month Ending January 31 Answer Less variable costs: Answer Answer Answer Answer Answer Less fixed costs: Answer Answer Answer b. Calculate the contribution margin per unit. Answer ÷ Answer = Contribution margin per unit Answer ÷ Answer = c. Calculate the contribution margin ratio.
