Express the cost of Goods sold and Selling expenses in term of cost equation. Redo the above income statement using a contribution margin approach.

Gallop Corporation prepared the following report for the first quarter of this vear: Gallop's controller, Nancy Johnstone, studied the costs in detail, particularly focusing on cost behaviour. Her analysis revealed the following: - Fixed portion of the cost of goods sold for the quarter amounted to $1,344,000. - Of the selling expenses, 20% was variable with respect to the number of units. - All of the administrative expenses were fixed