Dallas Gourmet Grocery (Dallas) expects to have the following financial accounting income statement for the current year
VARIABLE COSTING (CONTRIBUTION MARGIN) INCOME STATEMENT
Dallas Gourmet Grocery (Dallas) expects to have the following financial accounting income statement for the current year:
|
Sales
|
|
$20,000
|
|
Cost of goods sold
|
|
12,000
|
|
Gross Profit
|
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8,000
|
|
Selling, general and admin. expenses:
|
|
|
|
Advertising
|
300
|
|
|
Depreciation
|
1,900
|
|
|
Sales commissions
|
1,500
|
|
|
Office salaries
|
200
|
|
|
Insurance expense
|
900
|
|
|
Other expenses
|
1,200
|
6,000
|
|
Operating income
|
|
$ 2,000
|
Dallas management tells you that the variable component of cost of goods sold tends to average 80% of total cost of goods sold. In addition, advertising is 1/2 variable, the sales commissions are variable, and other expenses are 1/3 variable.
Prepare the variable costing (contribution margin) format income statement for Dallas.