J Bryant, Ltd. is a local coat retailer. The store’s accountant prepared the following income statement for the month ended January 31. Sales revenue $ 779,000 Cost of goods sold 334,500 Gross margin 444,500 Less operating expenses Selli
Fin-Acc-BossJ Bryant, Ltd. is a local coat retailer. The store’s accountant prepared the following income statement for the month ended January 31.
Sales revenue | $ | 779,000 | |||
Cost of goods sold | 334,500 | ||||
Gross margin | 444,500 | ||||
Less operating expenses | |||||
Selling expense | $ | 24,720 | |||
Administrative expense | 51,100 | 75,820 | |||
Net operating income | $ | 368,680 |
Bryant sells its coats for $250 each. Selling expenses consist of fixed costs plus a commission of $6.50 per coat. Administrative expenses consist of fixed costs plus a variable component equal to 5% of sales.
Contribution Format Income Statement
| Total | Per Unit | |
|
|
|
|
Sales |
| 779,000.00 | 250.00 |
Less: Variable Expenses |
|
|
|
Cost of Goods Sold | 334,500.00 |
| 107.35 |
Selling Expense | 20,254.00 |
| 6.50 |
Administrative Expenses | 38,950.00 |
| 12.50 |
Total Variable Expenses |
| 393,704.00 | 126.35 |
Contribution Margin |
| 385,296.00 | 123.65 |
Less: Fixed Expenses |
|
|
|
Selling Expense | 4,466.00 |
|
|
Administrative Expenses | 12,150.00 |
|
|
Total Fixed Expenses |
| 16,616.00 |
|
Operating Income |
| 368,680.00 |
|
QUESTION:
1. Operating Expenses = __________x + $_______________
2. If 3100 coats are sold next month, what is the expected total contribution margin? (Round answer to 0 decimal places, e.g. 45,000.)
9 years ago
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