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

Sales (@ $3,100 per unit)				$	8,060,000
Less: Cost of goods sold					3,332,000
Gross margin					4,728,000
Less:
Selling expenses	$	1,092,000
Administrative expenses		1,140,000			2,232,000
Income				$	2,496,000

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 $1,070,000.

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.)