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Gallop Corporation prepared the following report for the first quarter of this year: ...

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Accounting

Gallop Corporation prepared the following report for the first quarter of this year:
Sales (@ $2,900 per unit) $ 8,120,000
Less: Cost of goods sold 3,252,000
Gross margin 4,868,000
Less:
Selling expenses $ 1,052,800
Administrative expenses 1,060,0002,112,800
Income $ 2,755,200
Gallops controller, Nancy Johnstone, studied the costs in detail, particularly focusing on cost behaviour. Her analysis revealed the following:
Fixed portion of the cost of goods sold for the quarter amounted to $1,040,000.
Of the selling expenses, 20% was variable with respect to the number of units.
All of the administrative expenses were fixed.
Required:
1. Express the cost of goods sold and the selling expenses in terms of cost equations. (Round the "Variable cost" to 2 decimal places.)
2. Re-do and prepare the above income statement using a contribution margin approach. (Do not round intermediate calculations.)

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