The following income statement was drawn from the records of Butler Company, a merchandising firm:

BUTLER COMPANY Income Statement For the Year Ended December 31, 2014
Sales revenue (7,500 units $166)	$	1,245,000
Cost of goods sold (7,500 units $86)		(645,000	)
Gross margin		600,000
Sales commissions (10% of sales)		(124,500	)
Administrative salaries expense		(89,000	)
Advertising expense		(35,000	)
Depreciation expense		(50,000	)
Shipping and handling expenses (7,500 units $4)		(30,000	)
Net income	$	271,500

Required

a.

Reconstruct the income statement using the contribution margin format.

BUTLER COMPANY
Income Statement
For the Year Ended December 31, 2014
Less: Variable costs
Less: Fixed costs