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Preparing and evaluating a contribution income statement a) You are an external consultant, and providing consultancy service

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a)

Contribution Income Statement Amount
Total Sales $     5,83,00,000
Less-: Variable cost
Variable products cost $     2,28,00,000
Variable selling, general & administrative costs $     1,12,50,000
Contribution Margin $     2,42,50,000

b)

Controllable Contribution Income Statement Amount
Total Sales $     5,83,00,000
Less-: Variable cost
Variable products cost $     2,28,00,000
Variable selling, general & administrative costs $     1,12,50,000
Contribution Margin $     2,42,50,000
Less-: Traceable, controllable, fixed cost $     1,32,50,000
Controllable Contribution Margin $     1,10,00,000
Bonus@2% $          2,20,000

Manager should try to control traceable controllable fixed cost to increase the controllable contribution margin.

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