Reference: 06-13
A comparative income statement for Jimbob Co., a merchandising company, for the three months ended June is presented below.
Jimbob Co.
Comparative Income Statement
For the Second Quarter

\begin{array} { | l | r | r | l | } \hline & \text { April } & \text { May } & \text { June } \\\hline \text { Sales in units } & 4,500 & 5,250 & 6,000 \\\hline \text { Sales revenue } & \$ 630,000 & \$ 735,000 & \$ 840,000 \\\hline \text { Less cost of goods sold } & 252,000 & 294,000 & 336,000 \\\hline \text { Gross Margin } & 378,000 & 441,000 & 504,000 \\\hline \text { Less operating expenses: } & & & \\\hline \text { Shipping expense } & 56,000 & 63,500 & 71,000 \\\hline \text { Advertising expense } & 70,000 & 70,000 & 70,000 \\\hline \text { Salaries and commissions } & 143,000 & 161,750 & 180,500 \\\hline \text { Insurance expense } & 9,000 & 9,000 & 9,000 \\\hline \text { Depreciation expense } & 42,000 & 42,000 & 42,000 \\\hline \text { Total operating expenses } & { 320,000 } & 346,250 & 372,500 \\\hline \text { Net income } & \underline { \$ 88,000 } & \underline { \$ 94,750 } & \$ 131,500 \\\hline\end{array}

-What is the best estimate of the company's variable operating expenses per unit
A)$44.22 per unit.
B)$65.95 per unit.
C)$35.00 per unit.
D)$71.11 per unit.

Why Is It Important to Separate Mixed Costs into Fixed

Multiple Choice

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