2-25 Cost estimation; contribution format income statement (LO 2, 3) J Bryant, Ltd. is a...
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2-25 Cost estimation; contribution format income statement (LO 2, 3) J Bryant, Ltd. is a local coat retailer. The store's accountant prepared the following income statement for the month ended January 31: Sales revenue $750,000 300,000 Cost of goods sold Gross margin Less operating expenses Selling expense Administrative expense 450,000 $23,560 49,500 73,060 $376,940 Net operating income Bryant sells its coats for $300 each. Selling expenses consist of fixed costs plus a commission of $6 per coat. Administrative expenses consist of fixed costs plus a variable component equal to 5% of sales. Required a. Prepare a contribution format income statement for January. b. Using the format y = mx + b, develop a cost formula for total expenses. c. If 2,700 coats are sold next month, what is the expected total contribution margin
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