Gallop Corporation prepared the following report for the first quarter of this year:

Sales (@ $2,700 per unit)				$	6,480,000
Less: Cost of goods sold					3,232,000
Gross margin					3,248,000
Less:
Selling expenses	$	1,044,000
Administrative expenses		1,040,000			2,084,000
Income				$	1,164,000

Gallops 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 $1,024,000.
• Of the selling expenses, 20% was variable with respect to the number of units.
• All of the administrative expenses were fixed.

Required:

1. Express the cost of goods sold and the selling expenses in terms of cost equations. (Round the "Variable cost" to 2 decimal places.)

2. Redo the above income statement using a contribution margin approach. (Do not round intermediate calculations.)