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Gallop Corporation prepared the following report for the first quarter of this year: Sales (@ $2,700 per unit) Less: Cost of goods sold Gross margin $6,480,000 3,262,000 3,218,000 Less: Selling expenses Administrative expenses $1,058,400 1,070,000 2,128,400 $1,089,600 Income Gallop's controller, Nancy Johnstone, studied the costs in detail, particularly focusing on cost behaviour. Her analysis revealed the following: • Fixed portion of the cost of goods sold for the quarter amounted to $1,222,000. Of the selling expenses, 20% was variable with respect to the number of units. • All of the administrative expenses were fixed. Required: 1. Express the cost of goods sold and the selling expenses in terms of cost equations. (Round the "Variable cost" to 2 decimal places.) Y = per quarter Cost of goods sold Y = per quarter Selling expenses

Gallop Corporation prepared the following report for the first quarter of this year: Sales (@ $2,700 per unit) Less: Cost of goods sold Gross margin $6,480,000 3,262,000 3,218,000 Less: Selling expenses Administrative expenses $1,058,400 1,070,000 2,128,400 $1,089,600 Income Gallop's controller, Nancy Johnstone, studied the costs in detail, particularly focusing on cost behaviour. Her analysis revealed the following: • Fixed portion of the cost of goods sold for the quarter amounted to $1,222,000. Of the selling expenses, 20% was variable with respect to the number of units. • All of the administrative expenses were fixed. Required: 1. Express the cost of goods sold and the selling expenses in terms of cost equations. (Round the "Variable cost" to 2 decimal places.) Y = per quarter Cost of goods sold Y = per quarter Selling expenses

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2. Redo the above income statement using a contribution margin approach. (Do not round intermediate calculations.) GALLOP CORPORATION Income Statement For the First Quarter of this Year Less: Variable costs Less: Fixed expenses
Transcribed Image Text:2. Redo the above income statement using a contribution margin approach. (Do not round intermediate calculations.) GALLOP CORPORATION Income Statement For the First Quarter of this Year Less: Variable costs Less: Fixed expenses
Gallop Corporation prepared the following report for the first quarter of this year: Sales (@ $2,700 per unit) Less: Cost of goods sold Gross margin $6,480,000 3,262,000 3, 218, е00 Less: Selling expenses Administrative expenses $1,058,400 1,070,000 2,128,400 $1,089,600 Income Gallop's controller, Nancy Johnstone, studied the costs in detail, particularly focusing on cost behaviour. Her analysis revealed the following: • Fixed portion of the cost of goods sold for the quarter amounted to $1,222,00. • Of the selling expenses, 20% was variable with respect to the number of units. • All of the administrative expenses were fixed. Required: 1. Express the cost of goods sold and the selling expenses in terms of cost equations. (Round the "Variable cost" to 2 decimal places.) Y = per quarter Cost of goods sold Y = per quarter Selling expenses
Transcribed Image Text:Gallop Corporation prepared the following report for the first quarter of this year: Sales (@ $2,700 per unit) Less: Cost of goods sold Gross margin $6,480,000 3,262,000 3, 218, е00 Less: Selling expenses Administrative expenses $1,058,400 1,070,000 2,128,400 $1,089,600 Income Gallop's controller, Nancy Johnstone, studied the costs in detail, particularly focusing on cost behaviour. Her analysis revealed the following: • Fixed portion of the cost of goods sold for the quarter amounted to $1,222,00. • Of the selling expenses, 20% was variable with respect to the number of units. • All of the administrative expenses were fixed. Required: 1. Express the cost of goods sold and the selling expenses in terms of cost equations. (Round the "Variable cost" to 2 decimal places.) Y = per quarter Cost of goods sold Y = per quarter Selling expenses
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