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# Bernard Windows is a small company that installs windows. It cost structure is as follows:

Bernard Windows is a small company that installs windows. It cost structure is as follows:

Selling Price from each window installation \$500

Variable cost of each window installation \$400

Annual fixed costs \$150,000

Please provide (a) equation method and (b) contribution method to calculate operating income if Bernard installs 2,000 windows.

Equation Method: [(selling price) x (Qty of units sold) minus (variable cost per unit) x (Qty of units sold)] = Operating Income

Contribution Method:

[Selling price - variable cost per unit) x (Qty of units sold)] minus Fixed Costs = Operating Income

(Contribution margin per unit x Qty of units sold) minus Fixed costs = Operating Income

Thanks.

Equation Method : [(selling price) x (Qty of units sold) minus (variable cost per unit) x (Qty of... View the full answer

1 comment
• Thanks. Great!
• Apostle62
• Jan 01, 2018 at 7:20pm

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