prepare a contribution format income statement for january 613936

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

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Cost of goods sold		300,000
Gross margin		450,000
Less operating expenses
Selling	$23,560
Administrative	49,500	73,060
Net operating income		$376,940

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.

Required

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

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