Question

The following CVP income statements are available for Blanc Company and Noir Company. Blanc Company Noir...

The following CVP income statements are available for Blanc Company and Noir Company. Blanc Company Noir

Company Sales $455,000 $455,000 Variable costs 273,000 227,500 Contribution margin 182,000 227,500 Fixed costs 159,250 204,750 Net income $22,750 $22,750

Assuming that sales revenue increases by 20%, prepare a CVP income statement for each company. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Blanc Company

Noir Company

Sales

$Enter a dollar amount

$Enter a dollar amount

Variable costs Enter a dollar amount Enter a dollar amount
Contribution margin

Enter a total of the two previous amounts

Enter a total of the two previous amounts

Fixed costs Enter a dollar amount Enter a dollar amount
Net income / (Loss)

$Enter a total amount for this statement

$Enter a total amount for this statement

Assuming that sales revenue decreases by 20%, prepare a CVP income statement for each company. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Blanc Company

Noir Company

Sales

$Enter a dollar amount

$Enter a dollar amount

Variable costs Enter a dollar amount Enter a dollar amount
Contribution margin

Enter a total of the two previous amounts

Enter a total of the two previous amounts

Fixed costs Enter a dollar amount Enter a dollar amount
Net income / (Loss)

$Enter a total amount for this statement

$Enter a total amount for this statement

Homework Answers

Answer #1
The CVP income statement, if sales revenue increases by 20% is shown below
Blanc company Noir company
Sales (455,000*1.2) $546,000 $546,000
Variable costs $273,000 $227,500
Contribution margin $273,000 $318,500
Fixed costs $159,250 $204,750
Net income/(Loss) $113,750 $113,750
The increase in sales revenue would increase the net income
The CVP income statement, if sales revenue decreases by 20% is shown below
Blanc company Noir company
Sales (455,000*0.80) $364,000 $364,000
Variable costs $273,000 $227,500
Contribution margin $91,000 $136,500
Fixed costs $159,250 $204,750
Net income/(Loss) -$68,250 -$68,250
Decrease in sales revenue would lead to loss for both company
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