Answer
(N-1) Total costs 900 - Variable costs 500 = 400 Fixed cost
(N-2) Contribution margin 400 - Fixed Costs 400 = "NIL" Operating income
(N-3) Contribution Margin 400 / Revenues 900 = 44.4% Contribution Margin %
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
CM = Contribution Margin
FC = Fixed Costs
