Assignment
J Bryant, Ltd. is a local coat retailer. The store's accountant prepared the following income statement for the month ended January 31.
|
Sales revenue
|
|
$ 779,000
|
|
Cost of goods sold
|
|
334,500
|
|
Gross margin
|
|
444,500
|
|
Less operating expenses
|
|
|
|
Selling expense
|
$ 24,720
|
|
|
Administrative expense
|
51,100
|
75,820
|
|
Net operating income
|
|
$ 368,680
|
Bryant 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.
|
|
Total
|
Per Unit
|
|
Sales
|
|
779,000.00
|
250.00
|
|
Less: Variable Expenses
|
|
|
|
|
Cost of Goods Sold
|
334,500.00
|
|
107.35
|
|
Selling Expense
|
20,254.00
|
|
6.50
|
|
Administrative Expenses
|
38,950.00
|
|
12.50
|
|
Total Variable Expenses
|
|
393,704.00
|
126.35
|
|
Contribution Margin
|
|
385,296.00
|
123.65
|
|
Less: Fixed Expenses
|
|
|
|
|
Selling Expense
|
4,466.00
|
|
|
|
Administrative Expenses
|
12,150.00
|
|
|
|
Total Fixed Expenses
|
|
16,616.00
|
|
|
Operating Income
|
|
368,680.00
|
|
QUESTION:
1. Operating Expenses = __________x + $_______________
2. If 3100 coats are sold next month, what is the expected total contribution margin? (Round answer to 0 decimal places, e.g. 45,000.)