Lies Inc. prepared the followi

Lies Inc. prepared the following report for the first quarter ofthis year:

 Sales (2,500 units @ \$2,800 per unit) \$7,000,000 Less: Cost of Goods sold \$3,840,000 Gross Margin \$3,160,000 Less: SellingExpense \$1,024,000 AdministrativeExpense \$1,000,00 \$2,024,000 Income \$1,136,000

Lie’s controller, Billy Baroo, studied the costs in detail,particularly focusing on cost behaviour. Her analysis revealed thefollowing:

• Sixty-five percent of the cost of goods sold was variable withrespect to the number of units.
• Of the selling expenses, \$800,000 was fixed; the remaining wasvariable with respect to the number of units.
• All of the administrative expenses were fixed.

Required:

1. Express the cost of goods sold and the selling expenses interms of cost equations. Hint: y=ax+b
2. Redo the above income statement using a contribution marginapproach.

 Cost ofg goods sold: 38,40,000 Less: variable portion (65% of3840,000) 2496000 Fixed portion of COGS 13,44,000 Variable cost per unit(2496000/2500) 998.40 COGS = 1344,000 + 998.40x Selling expenses 1024000 Less: Fixed 800000 variableportion 224000 Divide: Units 2500 Variable portion per unit 89.6 Selling expense = 800,000 +89.60x Contribution Margin IncomeStatemetn Revenue (2500*2800) 70,00,000 Less: Variable cost COGS (998.40*2500) 2496000 Selling expense(89.60*2500) 224000 Total Variable cost 2720000 Contributionmargin 42,80,000 Less: Fixed cost COGS 1344000 Sellingexpenses 800000 Admin expense 1000000 Total Fixed cost 3144000 Net Income 11,36,000

"Our Prices Start at \$11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!"

Pages (275 words)
Standard price: \$0.00
Client Reviews
4.9
Sitejabber
4.6
Trustpilot
4.8
Our Guarantees
100% Confidentiality
Information about customers is confidential and never disclosed to third parties.
Original Writing
We complete all papers from scratch. You can get a plagiarism report.
Timely Delivery
No missed deadlines – 97% of assignments are completed in time.
Money Back
If you're confident that a writer didn't follow your order details, ask for a refund.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
\$0.00
Power up Your Academic Success with the
Team of Professionals. We’ve Got Your Back.
Power up Your Study Success with Experts We’ve Got Your Back.