QS 18-12 Contribution margin income statement LO P2 Zhao Co. has fixed costs of $286,200. Its single product sells for $163 per unit, and variable costs are $110 per unit. The company expects sales of 10,000 units. Prepare a contribution margin income statement for the year ended December 31, 2017.

Instructions are below.

Explanation:

Giving the following information:

Total fixed costs of $286,200.

Its single product sells for $163 per unit.

Unitary variable cost = $110 per unit. The company expects sales of 10,000 units.

Contribution margin income statement:

Sales = (10,000*163) = 1,630,000

Variable costs = (10,000*110) = (1,100,000)

Contribution margin = 530,000

Fixed costs = (286,200)

Net operating income = 243,800