Question

4 в 1 Chapter 2: Applying Excel $66,000 3 Data 4 Sales 5 Variable costs: 6 Cost of goods sold 7 Variable selling 8 Variable administrative 9 Fixed costs: 10 Fixed selling 11 Fixed administrative 12 $37,000 $3,700 $3,500 $2,500 $1,500 If your formulas are correct, you should get the correct answers to the following questions. (a) What is the gross margin now? Gross margin (b) What is the net operating income now? Net operating income (c) What is the contribution margin now? Contribution margin

Answer 1

1-a)
Sales	$66,000
Less: Cost of Goods Sold	($37,000)
Gross Margin	$29,000
b)
Sales	$66,000
Less: Cost of Goods Sold	($37,000)
Gross Margin	$29,000
Less: Selling and Administrative Expenses:
Variable Selling	($3,700)
Variable Administrative	($3,500)
Fixed Selling	($2,500)
Fixed Administrative	($1,500)
Net Operating Income	$17,800
c)
Sales	$66,000
Less: Variable Costs:
Cost of Goods Sold	($37,000)
Variable Selling	($3,700)
Variable Administrative	($3,500)
Contribution Margin	$21,800
2) 25% higher:
a)
Sales	$82,500
Less: Cost of Goods Sold	($46,250)
Gross Margin	$36,250
b)
Sales	$82,500
Less: Cost of Goods Sold	($46,250)
Gross Margin	$36,250
Less: Selling and Administrative Expenses:
Variable Selling	($4,625)
Variable Administrative	($4,375)
Fixed Selling	($2,500)
Fixed Administrative	($1,500)
Net Operating Income	$23,250
c)
Sales	$82,500
Less: Variable Costs:
Cost of Goods Sold	($46,250)
Variable Selling	($4,625)
Variable Administrative	($4,375)
Contribution Margin	$27,250