Question
J Coronado, Ltd. is a local coat retailer. The store's accountant prepared the following income statement for the month ended January 31: Sales revenue$751,000Cost of
J Coronado, Ltd. is a local coat retailer. The store's accountant prepared the following income statement for the month ended January 31:
Sales revenue$751,000Cost of goods sold385,500Gross margin365,500Operating expensesSelling expense$24,430Administrative expense50,65075,080Net operating income$290,420
Coronado sells its coats for $250 each. Selling expenses consist of fixed costs plus a commission of $6.50 per coat. Administrative expenses consist of fixed costs plus a variable component equal to 5% of sales.
I am having trouble figuring this one out due to the selling and administrative costs. Is there any help with this?
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