1 Chapter 1: Applying Excel 2 3 Data 45671 Sales $36,000 Variable costs: Cost of goods sold $18,000 Variable selling $1,800 8 Variable administrative $1,600 9 Fixed costs: 10 Fixed selling $2,500 11 Fixed administrative $1,500 12 13 Enter a formula into each of the cells marked with a ? below 14 Exhibit 1-7 Traditional Format Income Statement 15 16 17 Sales 18 Cost of goods sold 19 Gross margin 20 Selling and administrative expenses: 21 Selling 22 Administrative 23 Net operating income 24 25 Contribution Format Income Statement 26 Sales 27 Variable expenses: 28 Cost of goods sold 29 Variable selling 30 Variable administration 31 32 B3 34 35 36 37 Contribution margin Fixed expenses Fixed selling Fixed administrative Net operating income ? ? 222 ? ? ? ? ? ? ? ? If your formulas are correct, you should get the correct answers to the following questions. (a) What is the gross margin now? Gross margin 18,000 (b) What is the net operating income now? Net operating income $ 18.600 (c) What is the contribution margin now? Contribution margin $ 14,600 2. Suppose that sales are 2% higher as shown below: A B 1 Chapter 1: Applying Excel 2 3 Data 4 Sales $ 36,720 5 Variable costs: 6 Cost of goods sold $ 18,360 7 Variable selling 8 00 Variable administrative 69 69 1,836 $ 1.632 9 Fixed costs: 10 Fixed selling 69 $ 2.500 11 Fixed administrative $ 1,500 S Enter this new data into your worksheet. Make sure you enter all of the new data - not just the sales. (a) What is the gross margin now? Gross margin $ 18,360 (b) What is the net operating income now? Net operating income $ 18,892 (c) What is the contribution margin now? Contribution margin $ 14,892