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