Problem
The books of Robin Williams Company, wholesalers of hand-held calculators, reflected the following revenues and expenses for various months during the year ended July 31, 2016.
|
May
|
June
|
July
|
| |
Sales in units |
|
Sales revenues
Cost of goods sold
Gross margin
Operating Expenses
Advertising
Commissions
Selling expenses
Operating income
|
24,000
$336,000
(60,000)
$ 276,000
(35,000)
(72,000)
(16,600)
$152,400
|
28,000
$392,000
(70,000)
$322,000
(35,000)
(84,000)
(18,600)
$ 184,400
|
22,000
$308,000
(55,000)
$253,000
(35,000)
(66,000)
(15,600)
$ 136,400
|
REQUIRED
Identify the above expenses as variable, fixed, or mixed.
Separate each mixed expense into variable and fixed expense by using the high-low methods. State the cost formula for each mixed expense.
Prepare a contribution income statement for the month of June.