Top Posters
Since Sunday
21
o
6
d
6
A
5
H
5
n
4
t
4
d
4
p
4
r
4
s
4
C
3
Home Q & A Board Other Fields Homework Help Business Accounting
New Topic  
ceymorebucks24 ceymorebucks24
wrote...
Go to Answer
Posts: 74
Rep: 0 0
2 months ago
Mega Bright Window Cleaners' monthly income statement at several levels of activity is as follows:

Windows washed2,0004,0006,000
Sales revenue$3,000$6,000$9,000
Cost of goods sold 1,200 2,400 3,600
Gross profit 1,800 3,600 5,400
Operating expenses​​​
 Advertising expense500500500
 Salaries and wages expense7009001,100
 Insurance expense200200200
 Postage expense     500  1,000  1,500
Total operating expenses  1,900  2,600  3,300
Operating income$ (100)$1,000$2,100

Required:

a.Identify each expense as fixed, variable, or mixed.
b.Prepare a contribution margin income statement based on a volume of 5,000
windows.
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
Author:
Read 3 times
1 Reply
Replies
Answer verified by a subject expert
tswinson3tswinson3
wrote...
#1
Posts: 70
Rep: 0 0
2 months ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
a.Cost of goods sold — variable
Advertising — fixed
Salaries and Wages — mixed
Insurance — fixed
Postage — variable
b.Sales price = $3,000 ÷ 2,000 windows = $1.50 per window
Cost of goods sold = $1,200 ÷ 2,000 windows = $0.60 per window
Variable salaries = ($1,100 - $700) ÷ (6,000 - 2,000) = $0.10 per window
Postage = $500 ÷ 2,000 windows = $0.25 per window
Fixed salaries = $1,100 - (.1 × 6,000) = $500

​​5,000 WindowsPer Unit
Sales revenue​$7,500$1.50
Less variable costs:​​​
  Cost of goods sold$3,000​0.60
  Salaries500​0.10
  Postage1,250​ 0.25
   Total variable costs​ 4,750 0.95
Contribution margin​2,750$0.55
Less fixed costs:​​​
  Advertising500​​
  Salaries500​​
  Insurance   200​​
   Total fixed costs​  1,200​
Operating Income​$1,550​
1

Related Topics

ceymorebucks24 Author
wrote...

2 months ago
You make an excellent tutor!
emilyas19
wrote...

Yesterday
Thank you, thank you, thank you!
rene_ram97
wrote...

2 hours ago
Correct Slight Smile TY
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  247 People Browsing
 322 Signed Up Today
Start New Topic Take the Tour Study Tips Study ToolsNew Topics Trending Browse by Textbook
Related Images
  
 182
  
 154
  
 92
Your Opinion
What's your favorite coffee beverage?
Votes: 257
Previous poll results: What's your favorite math subject?