The Central Valley Company is a merchandising firm that sells a single product. The companys revenues and expenses for the last three months are given below:

Central Valley Company Comparative Income Statement For the Second Quarter April May June Sales in units . 4,500 5,250 6,000 Sales revenue $630,000 $735,000 $840,000 Less cost of goods sold $252,000 294,000 336,000 Gross Margin . $378,000 441,000 504,000

Less operating expenses: 

Expense A ..56,000 63,500 71,000

 Expense B ..70,000 70,000 70,000 

Expense C ..143,000 161,750 180,500 

Expense D ..9,000 9,000 9,000 

Expense E ..42,000 42,000 42,000

 Total operating expenses 320,000 346,250 372,500

 Net income.$58,000 $94,750 $131,500

 

Required to do:

Q1. Determine which expenses are mixed and, by use of the high-low method, separate each mixed expense into its variable and fixed components. State the cost formula for each mixed expense.

Q2. Compute the companys total contribution margin for May.

Company total contribution margin Accounting Basics

Answer rating: 100% (QA)

Q1 Identifying Mixed Expenses and Separating Costs HighLow Method Mixed Expenses Based on the provided information we can identify expenses that likel... View the full answer