Final answer:
The contribution format income statement for Vulcan Company in June separates expenses into fixed and variable categories, and calculates the contribution margin ratio.
Step-by-step explanation:
The contribution format income statement for Vulcan Company in June is a financial statement that shows the company's revenues, expenses, and net income using the contribution margin format. It separates expenses into fixed and variable categories, and calculates the contribution margin ratio, which is the percentage of revenue that contributes to covering fixed expenses and generating profit.
To create the contribution format income statement, follow these steps:
- List all the revenues from sales.
- Subtract the variable expenses directly related to the sales revenue.
- Calculate the contribution margin by subtracting fixed expenses from the remaining amount.
- Finally, deduct any non-operating expenses or additional income to arrive at the net income.
For example, let's say Vulcan Company had $100,000 in sales revenue, $50,000 in variable expenses, and $30,000 in fixed expenses. The contribution margin would be $20,000 ($100,000 - $50,000 - $30,000). If there were non-operating expenses of $5,000, the net income would be $15,000.