Answer
(N-1): Total Costs 1,200 - Variable Costs 800 = 400 Fixed Costs.
(N-2) Operating Income 1,000 + 400 Fixed Costs = 1,400 Contribution Margin.
(N-3) Contribution Margin 1,400 + 800 Variable Costs = 2,200 Revenues.
(N-4) 1,400 / 2,200.
Work Step by Step
This question requires working backward through the income statement to find out missing figures.
As we know, in CVP analysis, fixed costs are separated from cost of sales and treated as a period costs. Therefore, we shall use contribution margin income statement format to solve this problem
