J Marigold, Ltd. is a local coat retailer. The stores accountant prepared the following income statement for the month ended January 31:

Sales revenue					$	758,500
Cost of goods sold						530,950
Gross margin						227,550
Operating expenses
Selling expense		$	24,090
Administrative expense			51,440			75,530
Net operating income					$	152,020

Marigold 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.

(a)

Correct answer iconYour answer is correct.

Prepare a contribution format income statement for January. (Round per unit cost to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)

					Per Unit
select an income statement item Fixed ExpensesCost of Goods SoldTotal Fixed ExpensesSales RevenueOperating IncomeTotal Variable ExpensesContribution MarginVariable ExpensesSelling ExpenseAdministrative Expense			$enter a dollar amount		$enter a dollar amount
select an opening name for section one Contribution MarginTotal Variable ExpensesCost of Goods SoldSelling ExpenseTotal Fixed ExpensesSales RevenueFixed ExpensesAdministrative ExpenseVariable ExpensesOperating Income:
select an income statement item Operating IncomeFixed ExpensesCost of Goods SoldTotal Fixed ExpensesAdministrative ExpenseContribution MarginSelling ExpenseTotal Variable ExpensesVariable ExpensesSales Revenue		enter a dollar amount			enter a dollar amount
select an income statement item Administrative ExpenseCost of Goods SoldFixed ExpensesSales RevenueVariable ExpensesContribution MarginTotal Fixed ExpensesSelling ExpenseOperating IncomeTotal Variable Expenses		enter a dollar amount			enter a dollar amount
select an income statement item Variable ExpensesOperating IncomeFixed ExpensesContribution MarginCost of Goods SoldAdministrative ExpenseSales RevenueSelling ExpenseTotal Variable ExpensesTotal Fixed Expenses		enter a dollar amount			$enter a dollar amount
select a closing name for section one Administrative ExpenseFixed ExpensesOperating IncomeContribution MarginSales RevenueCost of Goods SoldVariable ExpensesTotal Variable ExpensesTotal Fixed ExpensesSelling Expense			enter a total amount for section one		enter a total amount per unit for section one
select a summarizing line for the first part Fixed ExpensesAdministrative ExpenseTotal Fixed ExpensesSelling ExpenseCost of Goods SoldVariable ExpensesContribution MarginTotal Variable ExpensesSales RevenueOperating Income			enter a total amount for the first part		$enter a total amount per unit for the first part
select an opening name for section two Total Variable ExpensesSelling ExpenseOperating IncomeContribution MarginVariable ExpensesTotal Fixed ExpensesAdministrative ExpenseSales RevenueCost of Goods SoldFixed Expenses:
select an income statement item Sales RevenueSelling ExpenseOperating IncomeContribution MarginCost of Goods SoldTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesAdministrative ExpenseFixed Expenses		enter a dollar amount
select an income statement item Total Fixed ExpensesCost of Goods SoldAdministrative ExpenseSales RevenueSelling ExpenseOperating IncomeFixed ExpensesContribution MarginVariable ExpensesTotal Variable Expenses		enter a dollar amount
select a closing name for section two Contribution MarginTotal Variable ExpensesFixed ExpensesOperating IncomeTotal Fixed ExpensesSales RevenueAdministrative ExpenseCost of Goods SoldSelling ExpenseVariable Expenses			enter a total amount for section two
select a closing name for this statement Total Fixed ExpensesOperating IncomeSelling ExpenseContribution MarginSales RevenueVariable ExpensesCost of Goods SoldAdministrative ExpenseFixed ExpensesTotal Variable Expenses			$enter a total amount for this statement

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Attempts: 1 of 5 used

Using multiple attempts will impact your score.

5% score reduction after attempt 4

(b)

Using the format y = mx + b, develop a cost formula for total expenses. (Round unit cost to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)

Operating expenses =

$enter a dollar amount rounded to 2 decimal places x

+

$enter a dollar amount rounded to 0 decimal places