Frank Company Assignment
Income Statements
For the 3 months ending September 30, 2020
	July	August	September
Sales in units	4,000	4,500	5,000
Sales	$ 400,000	$ 450,000	$ 500,000
Cost of goods sold	240,000	270,000	300,000
Gross Margin	160,000	180,000	200,000
Selling & Administrative Expenses:
Advertising	21,000	21,000	21,000
Shipping	34,000	36,000	38,000
Salaries and commissions	78,000	84,000	90,000
Insurance	6,000	6,000	6,000
Depreciation	15,000	15,000	15,000
Total Selling & Administrative Expenses	154,000	162,000	170,000
Net Operating Income	$ 6,000	$ 18,000	$ 30,000
Required:
1. Use the high low method to determine the cost equation for each item on the income statement.
2. Using the cost equations, create the contribution income statement for 5,000 units.
3. Using the cost equations, create the contribution income statement for 4,800 units.