J Bryant, Ltd. is a local coat retailer. The store's accountant prepared the following income statement for the month ended January 31.
| Sales revenue |
|
|
$ |
750,000 |
|
| Cost of goods sold |
|
|
|
300,000 |
|
| Gross margin |
|
|
|
450,000 |
|
| Less operating expenses |
|
|
|
|
|
| Selling expense |
$ |
23,560 |
|
|
|
| Administrative expense |
|
49,500 |
|
73,060 |
|
| Net operating income |
|
|
$ |
376,940 |
Bryant sells its coats for $250 each. Selling expenses consist of fixed costs plus a commission of $6.5 per coat. Administrative expenses consist of fixed costs plus a variable component equal to 5% of sales.Using the format y = mx + b,
develop a cost formula for total expensesIf 2,700 coats are sold next month, what is the expected total contribution margin?