Skate World is a merchandising company that sells skateboards both at its retail store and its online store. Results for the most recentthree months are shown below.Sales in unitsSalesCost of goods soldGross marginSelling and administrative expenses:Advertising expenseShipping expenseSalaries and commissionsInsurance expenseDepreciation expenseTotal selling and administrative expensesOperating incomeJulyAugust4,0004,500$400,000 $450,000240,000270,000160,000180,00021,00034,00078,0006,00015,000154,00021,00036,00084,0006,00015,000162,000$ 6,000 $ 18,000September5,000$ 500,000300,000200,00021,00038,00090,0006,00015,000170,000$ 30,000 Required:1. Identify each of the company's expenses (including cost of goods sold) as either variable, fixed, or mixed.ExpensesCost of goods soldAdvertising expenseShipping expenseSalaries and commissionsInsurance expenseDepreciation expenseClassification2. Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixedexpenseSalesVariable expenses:VariableFixedMixedMixedFixedFixedFixed expenses:Variable Costper unitper unitFixed CostY=Y=Skate WorldIncome StatementFor the Month Ended September 3043. Redo the company's income statement for September using the contribution format.Formula•per unitper unit

Mixed Costs - Mixed Cost is those cost that includes fixed components and variable components. Fixed…

Skate World is a merchandising company that sells skateboards both at its retail store and its online store. Results for the most recent three months are shown below.. Sales in units Sales Cost of goods sold Gross margin Selling and administrative expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense. Depreciation expense Total selling and administrative expenses Operating income July 4,000 4,500 $400,000 $450,000 240,000 270,000 160,000 180,000 21,000 34,000 78,000 August 21,000 36,000 84,000 6,000 15,000 162,000 $ 6,000 $ 18,000 6,000 15,000 154,000 September 5,000 $500,000 300,000 200,000 21,000 38,000 90,000 6,000 15,000 170,000 $ 30,000

Skate World is a merchandising company that sells skateboards both at its retail store and its online store. Results for the most recent three months are shown below.. Sales in units Sales Cost of goods sold Gross margin Selling and administrative expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense. Depreciation expense Total selling and administrative expenses Operating income July 4,000 4,500 $400,000 $450,000 240,000 270,000 160,000 180,000 21,000 34,000 78,000 August 21,000 36,000 84,000 6,000 15,000 162,000 $ 6,000 $ 18,000 6,000 15,000 154,000 September 5,000 $500,000 300,000 200,000 21,000 38,000 90,000 6,000 15,000 170,000 $ 30,000

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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