B 1 To aid in planning, Jay Corporation is preparing a contribution format income statement. 2 3 Budgeted information for Quarter 1 of Year 3: Sales in units 17,000 5 Sales price per unit 48.00 4 6 7 After analyzing expenses, the company has determined the following cost patterns. 8 Cost of goods sold 29.00 per unit 9 Sales commissions 9.50% per dollar of sales 10 11 Administrative salaries 45,000.00 per quarter 12 Rent expense 27,000.00 per quarter 13 Depreciation expense 36,000.00 per quarter 14 Management has concluded that shipping expense is a mixed cost. Units shipped and the related shipping cost over the last eight quarters are: Total Shipping Cost $ 67,000.00 $ 94,000.00 $ 89,800.00 92,600.00 Units 12,500 21,000 13,800 20,000 $ Year 1 3 Quarter 1 9 Quarter 2 0 Quarter 3 1 Quarter 4 -2 Year 2 23 Quarter 1 24 Quarter 2 25 Quarter 3 26 Quarter 4 $ $ $ $ 72,500.00 80,000.00 84,000.00 100,000.00 13,700 14,000 14,300 22,500 44 2. Prepare a contribution format income statement for Quarter 1 of Year 3. 45 46 Jay Corporation 47 Budgeted Contribution Format Income Statement 48 For Year 3, Quarter 1 49 50 Sales 51 Variable expenses: 52 Cost of goods sold 53 Sales commissions 54 Shipping expense 55 Total variable expenses 56 Contribution margin 57 Fixed expenses: 58 Administrative salaries 59 Rent expense 60 Shipping expense 61 Depreciation expense 62 Total fixed expenses 63 Net operating income