The contribution income statement is helpful to managers in judging the impact on profits of changes in selling price, cost, or volume. Racing bicycle company must generate at least $80,000 in total Contribution Margin to breakeven, which is the level at which profit is zero. Racing bicycle company's Contribution Margin is the amount remaining from sales revenue after variable expenses have been deducted.
The contribution income statement is helpful to managers in judging the impact on profits of changes in selling price, cost, or volume. Racing bicycle company must generate at least $80,000 …