J Bryant, Ltd. is a local  coat retailer. The store’s accountant prepared the following income statement for the month ended  January 31:

Bryant sells its coats for $200 each. Selling expenses consist of fixed costs plus a commission of $6 per  coat. Administrative expenses consist of fixed costs plus a variable component equal to 6% of sales.

Required

a. Prepare a contribution format income statement for January.

b. Using the format y = mx + b, develop a cost formula for total expenses.

c. If 4,000 coats are sold next month, what is the expected total contribution margin?

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Sales revenue $750,000 525,000 Cost of goods sold Gross margin Less operating expenses Selling expense Administrative expense 225,000 $41,060 68,600 109,660 Operating income $115,340