Question

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 $779,000 Cost of goods sold 334,500 Gross margin 444,500 Less operating expenses Selling expense$24,720 Administrative expense 51,100 75,820 Net operating income $368,680 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.Contribution Format Income Statement Total Per Unit Sales 779,000.00250.00Less: Variable Expenses Cost of Goods Sold334,500.00 107.35Selling Expense20,254.00 6.50Administrative Expenses38,950.00 12.50Total Variable Expenses 393,704.00126.35Contribution Margin 385,296.00123.65Less: Fixed Expenses Selling Expense4,466.00 Administrative Expenses12,150.00 Total Fixed Expenses 16,616.00 Operating Income 368,680.00 QUESTION:1. Operating Expenses = __________x + $_______________2. If 3100 coats are sold next month, what is the expected total contribution margin? (Round answer to 0 decimal places, e.g. 45,000.)

Answer 1

1: $75,820

2: $442,215.

Step-by-step explanation:

1: The operating expenses can be described as normal or routine expense of a business. The operating expense for the J Bryant, Ltd For the month ended January 31 will be $75,820. This figure includes Selling expense and Administrative Expense which is $24,720 and $ 51,100.

2: The contribution margin is determined by subtracting Total Variable cost from Total Revenue. When the company sells 3,100 units next month then Total Sales is $775,000 (3,100 units * $250 per unit) and Total Variable Cost is $332,785 (3,100 * $107.35 per unit). To calculate total contribution margin we subtract Total variable cost from Total sales which gives us $442,215 ($775,000 - $332,785).