Answer:
See the instructions below.
Explanation:
Here is the provided information:
Q= 1,000 units sold
Sales amounting to $ 345,000
Starting merchandise inventory at $ 23,000
Total purchases of $ 230,000
Ending merchandise inventory valued at $ 11,500
Fixed selling expense is $?
Fixed administrative expense totals $ 13,800
Variable selling expense is $ 17,250
Variable administrative expense is $?
Contribution margin stands at $ 69,000
Net operating income equals $ 20,700
Cost of goods sold (COGS) is calculated as: beginning inventory + purchases - ending inventory = 23000 + 230000 - 11500 = $241,500
1) Total revenue is 345000
COGS amounts to 241500
Variable selling expense equals 17250
Variable administrative expense=? =17250 (345000 - 241500 - 17250 - 69000)
The contribution margin is 69000
Fixed selling expense=? = 34500 (69000 - 13800 - 20700)
Fixed administrative expense is 13,800
Net income is 20,700
2) Sales total 345,000
COGS reaches 241500
Gross profit comes to 103500
Administrative expense totals 31050
Selling expense is 51750
Net income arrives at 20700
3) Selling price per unit calculation: total sales/Q= 345000/1000= $345
4) Variable cost per unit calculation: total variable cost/Q= (241500+17250+17250)= $276000/1000= $276
5) Contribution margin per unit calculation: 69000/1000= 69
6) The contribution format income statement is advantageous as it clearly illustrates how each unit influences the contribution margin.
