Question

А B D E F G 2 A1 fix Jay Corporation has decided to prepare contribution income statements for C 1 Jay Corporation has decided to prepare contribution income statements for internal planning. 3 Budgeted information for Quarter 1 of Year 3: Sales in units 17,000 Sales price per unit 48.00 7 After analyzing expenses, the company has determined the following cost patterns, 8 Cost of Goods Sold (per unit) S 29.00 9 Sales Commissions (per dollar of sales) 9.50% 10 11 Administrative Salaries (per quarter) s 45,000.00 12 Rent Expense (per quarter) $ 27.000.00 13 Depreciation Expense (per quarter) S 36,000.00 4 5 6 $ 14 15 16 1. Prepare a contribution margin income statement for Quarter 1 of Year 3. 17 18 19 20 Jay Corporation Budgeted Income Statement For Year 3. Quarter 1 21

Answer 1

Jay Corporation

Budgeted Income Statement

For Year 3, Quarter 1

Sales		$8,16,000
Variable Expenses:
Cost of Goods Sold	$4,93,000
Sales Commissions	$77,520
Total variable expenses		$5,70,520
Contribution Margin		$2,45,480
Fixed Expenses:
Administrative Salaries	$45000
Rent Expense	$27000
Depriciation Expense	$36000
Total Fixed Expense		$1,08,000
Net Operarting Income		$1,37,480

Calculation:

Sales = 17000 unit * $48 per unit = $8,16,000

Cost of Goods Sold = 17000 unit * $29 per unit = $4,93,000

Sales Commission = $8,16,000 * 9.5 % = $77,520

Contribution margin = Sales - Total Variable expenses

= $8,16,000-$5,70,520

= $2,45,480

Administrative Salaries, Rent Expenses, Depeiciation Expenses as mentioned in the above question

Net Operating Income = Contribution Margin - Total Fixed Expenses

= $ 2,45,280 - $ 1,08,000

=$ 1,37,480