Biology Forums - Study Force

J Bryson, Ltd. is a local coat retailer. The store's accountant prepared the following income statement for the month ended January 31.

Sales revenue	​	$750,000
Cost of goods sold	​	300,000
Gross margin	​	450,000
Less operating expenses	​	​
Selling expense	$23,560	​
Administrative expense	49,500	73,060
Operating income	​	$376,940

Bryson 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 6% of sales.

Required:

a. Prepare a contribution format income statement for January.
b. Using the format y = mx + b, develop a cost formula for the operating expenses.
c. If 2,700 coats are sold next month, what is the expected total contribution margin?

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