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Dallas Gourmet Grocery (Dallas) expects to have the following financial accounting income statement for the current year VARIABLE COSTING (CONTRIBUTION MARGIN) INCOME STATEMENT Dallas Gourmet Grocery (Dallas) expects to have the following financial accounting income statement for the current year:
Sales
$20,000
Cost of goods sold
12,000
Gross Profit
8,000
Selling, general and admin. expenses:
Advertising
300
Depreciation
1,900
Sales commissions
1,500
Office salaries
200
Insurance expense
900
Other expenses
1,200
6,000
Operating income
$ 2,000
Dallas management tells you that the variable component of cost of goods sold tends to average 80% of total cost of goods sold. In addition, advertising is 1/2 variable, the sales commissions are variable, and other expenses are 1/3 variable. Prepare the variable costing (contribution margin) format income statement for Dallas.
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