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

Sales (@ $2,800 per unit)				$	7,280,000
Less: Cost of goods sold					3,242,000
Gross margin					4,038,000
Less:
Selling expenses	$	1,047,800
Administrative expenses		1,050,000			2,097,800
Income				$	1,940,200

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 $1,214,000.
• 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. Re-do and prepare the above income statement using a contribution margin approach. (Do not round intermediate calculations.)

Saved Help ssignment #2 (will be graded) Gallop Corporation prepared the following report for the first quarter of this year: $7,280,000 3,242,000 4,038,000 Sales (@ $2,800 per unit) Less: Cost of goods sold Gross margin Less: Selling expenses Administrative expenses Income $1,047,800 1,050,000 2,097,800 $1,940,200 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 $1,214,000. 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.) This is a numeric cell, so please enter numbers only. Cost of goods sold Selling expenses Erter X + + Y = per quarter 2. Re-do and prepare the above income statement using a contribution margin approach. (Do not round intermediate calculations.) GALLOP CORPORATION Income Statement For the First Quarter of this Year Sales Less: Variable costs $ 7,280,000 $ 0 7,280,000 Less: Fixed expenses $ 7,280,000