onlne Question Completion Status: $51,00 0. QUESTION 11 12 points Save Cosgrove

Question

onlne Question Completion Status: $51,00 0. QUESTION 11 12 points Save Cosgrove Company, Inc, is a wholesaler that distributes a single product. The company's revenues and expenses for the last three months are given below Cosgrove Company Traditional Format income Statement For the Three Months Ended June May June Sales in 3000 3,750 4500 $420000 $525000 $830,000 Sales nevenue Cost of goods sold Selling and Shipping expense 4,000 50,000 56,000 0,000 70,000 70.000 07.000 125,000 143 000 Total sellng Net operating income floss) native-???? Required a dentify the fixed and variable costs associated with Cosgrove. b. Calculate the average costs per month The

Explanation / Answer

April May June Naure Remarks Sales in Units 3000 3750 4500 Sales Revenue 420000 525000 630000 Cost of Goods Sold 168000 210000 252000 Variable Since COGS is 56 per unit for every month Gross Margin 252000 315000 378000 Selling and administrative expenses: Shipping Expense 44000 50000 56000 Mixed Since Per unit cost is not same Advertising Expense 70000 70000 70000 Fixed Salaries & Commissions 107000 125000 143000 Mixed Since Per unit cost is not same Insurance Expense 9000 9000 9000 Fixed Depreciation Expense 42000 42000 42000 Fixed Total Selling and administrative expenses 272000 296000 320000 Net Operating Income/(loss) -20000 19000 58000 Shipping Expense: Variable Cost per unit (56000-44000)/(4500-3000) Variable Cost per unit $ 8 Per unit Fixed Cost Total Cost-Total Variable Cost 56000-(8*4500) $ 20000 Formula 20000+8x Sales and commissions: Variable Cost per unit (143000-107000)/(4500-3000) Variable Cost per unit $ 24 Per unit Fixed Cost Total Cost-Total Variable Cost 143000-(24*4500) $ 35000 Formula 35000+24x Variable: April May June Cost of Goods Sold 168000 210000 252000 Shipping Expense (8 per unit) 24000 30000 36000 Advertising Expense 0 0 0 Salaries & Commissions (24 per unit) 72000 90000 108000 Insurance Expense 0 0 0 Depreciation Expense 0 0 0 Total Variable Cost 264000 330000 396000 Fixed: Shipping Expense 20000 20000 20000 Salaries & Commissions 35000 35000 35000 Advertising Expense 70000 70000 70000 Insurance Expense 9000 9000 9000 Depreciation Expense 42000 42000 42000 Total Fixed Cost 176000 176000 176000 Total Cost 440000 506000 572000 Units 3000 3750 4500 Average Cost per month                                                 146.67      134.93      127.11

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