Question

O&A Corporation, a merchandising company, reported the following results for September:

Number of units sold……………………..…. 7,400

Selling price per unit ………………….…...…339

Cost of goods sold ………………….....531,500

Total Variable selling expense ………..….. 99,900

Total fixed selling expense …………..…77,800

Total Variable administrative expense …... 44,400

Total fixed administrative expense ……..185,200

Questions: What is the total variable selling expense? (Contribution income statement format)

What is the total variable expense? (Contribution income statement format)

What is the contribution margin? (Contribution income statement format)

What is the gross margin? (Traditional income statement format)

What is the total administrative expense? (Traditional income statement format)

What is the net operating income? (Traditional income statement format)

Answer 1

O&A Corporation
For the month of September
Contribution Format Income Statement
Sales ( 7,400 x 339)		2,508,600
Variable expenses:
Cost of goods sold	531,500
Variable selling expense	99,900
Variable administrative expense	44,400
Total variable expenses		-675,800
Contribution Margin		1,832,800
Fixed expenses:
Total fixed selling expenses	77,800
Total fixed administrative expenses	185,200
Total fixed expenses		-263,000
Net operating income		$1,569,800

O&A Corporation
For the month of September
Traditional Income Statement
Sales (7400 x 339)		2,508,600
Less: Cost of goods sold		-531,500
Gross profit		1,977,100
Selling and administrative expenses:
Total variable selling expenses	99,900
Fixed selling expenses	77,800
Variable administrative expenses	44,400
Fixed administrative expenses	185,200
Total selling and administrative expenses		-407,300
Net operating income		$1,569,800