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Berg Dry Cleaners has determined the following about its costs: Total variable expenses are $40,000; total...

Berg Dry Cleaners has determined the following about its costs: Total variable expenses are $40,000; total fixed expenses are $30,000, and the sales revenue needed to break even is $40,000. Use the contribution margin income statement and the shortcut contribution margin approaches to determine Berg Dry Cleaners’ current (1) sales revenue and (2) operating income. (Hint: First find the contribution margin ratio; then prepare the contribution margin income statement.)

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Answer #1

1) Sales revenue = $160,000.

2 ) Operating income = $90,000.

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