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.

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

- Thanks. Great!
- Apostle62
- Jan 01, 2018 at 7:20pm

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Answer A. Equation method... View the full answer