1. Scrappy Sales Company is a distributor that has an exclusive franchise to sell a particular product made by another company. Scrappy Sales Company's traditional format income statements for the last two years are given below:

			This Year	Last Year
		Units sold	200,000	160,000
		Sales revenue	$1,000,000	$800,000
		Cost of goods sold	700,000	560,000
		Gross margin	300,000	240,000
	Selling and administrative expense		210,000	198,000
	Net operating income		$90,000	$ 42,000

Selling and administrative expense is a mixture of fixed costs and variable costs that vary with respect to the number of units sold. Assume that all the activity levels mentioned in this problem are within the relevant range.

Required:

Estimate the company's variable selling and administration expense per unit

Estimate the companys total fixed selling and administrative expense per year.

Determine the company's contribution margin for this year.