Question

Waterway Window Cleaners’ monthly income statement at several levels of activity is as follows:

Windows washed		2,000		4,200		8,600
Sales revenue	$	3,500	$	7,350	$	15,050
Cost of goods sold		1,400		2,940		6,020
Gross profit		2,100		4,410		9,030
Operating expenses
Advertising expense		400		400		400
Salaries and wages expense		700		920		1,360
Insurance expense		200		200		200
Postage expense		420		882		1,806
Total operating expense		1,720		2,402		3,766
Operating income	$	380	$	2,008	$	5,264

(a) Identify each expense as fixed, variable, or mixed.

Cost of goods sold		select the type of cost                                                          variablemixedfixed
Advertising expense		select the type of cost                                                          mixedvariablefixed
Salaries and Wages expense		select the type of cost                                                          variablemixedfixed
Insurance expense		select the type of cost                                                          mixedvariablefixed
Postage expense		select the type of cost                                                          fixedvariablemixed

(b) Prepare a contribution margin income statement based on a volume of 6,900 windows. (Round unit cost to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)

			6,900 windows		Per Unit
select an income statement item                                                          Advertising ExpenseContribution MarginCost of Goods SoldFixed ExpensesInsurance ExpenseOperating IncomePostage ExpenseSalaries ExpenseSales RevenueTotal Fixed ExpensesTotal Variable ExpensesVariable Expenses			$enter a dollar amount		$enter a dollar amount
select an income statement item                                                          Advertising ExpenseContribution MarginCost of Goods SoldFixed ExpensesInsurance ExpenseOperating IncomePostage ExpenseSalaries ExpenseSales RevenueTotal Fixed ExpensesTotal Variable ExpensesVariable Expenses:
select an income statement item                                                          Advertising ExpenseContribution MarginCost of Goods SoldFixed ExpensesInsurance ExpenseOperating IncomePostage ExpenseSalaries ExpenseSales RevenueTotal Fixed ExpensesTotal Variable ExpensesVariable Expenses		enter a dollar amount			enter a dollar amount
select an income statement item                                                          Advertising ExpenseContribution MarginCost of Goods SoldFixed ExpensesInsurance ExpenseOperating IncomePostage ExpenseSalaries ExpenseSales RevenueTotal Fixed ExpensesTotal Variable ExpensesVariable Expenses		enter a dollar amount			enter a dollar amount
select an income statement item                                                          Advertising ExpenseContribution MarginCost of Goods SoldFixed ExpensesInsurance ExpenseOperating IncomePostage ExpenseSalaries ExpenseSales RevenueTotal Fixed ExpensesTotal Variable ExpensesVariable Expenses		enter a dollar amount			enter a dollar amount
select an income statement item                                                          Advertising ExpenseContribution MarginCost of Goods SoldFixed ExpensesInsurance ExpenseOperating IncomePostage ExpenseSalaries ExpenseSales RevenueTotal Fixed ExpensesTotal Variable ExpensesVariable Expenses			enter a total amount for section one		enter a total amount per unit for section one
select an income statement item                                                          Advertising ExpenseContribution MarginCost of Goods SoldFixed ExpensesInsurance ExpenseOperating IncomePostage ExpenseSalaries ExpenseSales RevenueTotal Fixed ExpensesTotal Variable ExpensesVariable Expenses			enter a total amount for the first part		$enter a total amount per unit for the first part
select an income statement item                                                          Advertising ExpenseContribution MarginCost of Goods SoldFixed ExpensesInsurance ExpenseOperating IncomePostage ExpenseSalaries ExpenseSales RevenueTotal Fixed ExpensesTotal Variable ExpensesVariable Expenses:
select an income statement item                                                          Advertising ExpenseContribution MarginCost of Goods SoldFixed ExpensesInsurance ExpenseOperating IncomePostage ExpenseSalaries ExpenseSales RevenueTotal Fixed ExpensesTotal Variable ExpensesVariable Expenses		enter a dollar amount
select an income statement item                                                          Advertising ExpenseContribution MarginCost of Goods SoldFixed ExpensesInsurance ExpenseOperating IncomePostage ExpenseSalaries ExpenseSales RevenueTotal Fixed ExpensesTotal Variable ExpensesVariable Expenses		enter a dollar amount
select an income statement item                                                          Advertising ExpenseContribution MarginCost of Goods SoldFixed ExpensesInsurance ExpenseOperating IncomePostage ExpenseSalaries ExpenseSales RevenueTotal Fixed ExpensesTotal Variable ExpensesVariable Expenses		enter a dollar amount
select an income statement item                                                          Advertising ExpenseContribution MarginCost of Goods SoldFixed ExpensesInsurance ExpenseOperating IncomePostage ExpenseSalaries ExpenseSales RevenueTotal Fixed ExpensesTotal Variable ExpensesVariable Expenses			enter a total amount for section two
select an income statement item                                                          Advertising ExpenseContribution MarginCost of Goods SoldFixed ExpensesInsurance ExpenseOperating IncomePostage ExpenseSalaries ExpenseSales RevenueTotal Fixed ExpensesTotal Variable ExpensesVariable Expenses			$enter a total amount for this statement

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Answer 1

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