Managerial Accounting: P2-20 Mighty Bright Window Cleaners’ monthly income

Managerial Accounting 
Problem 2-20 Cost Behavior Identification; Contribution Format Income Statement 
Mighty Bright Window Cleaners’ monthly income statement at several levels of activity is as follows: 
2,000 4,000 6,000 
Sales revenue 3,000 6,000 9,000 
Cost of goods sold 1,200 2,400 3,600 
Gross profit 1,800 3,600 5,400 
Operating expenses 
Advertising expenses 400 400 400 
Salaries and wages expense 700 900 1,100 
Insurance expense 200 200 200 
Postage expense 400 800 1,200 
Total operating expenses 1,700 2,300 2,900 
Operating income $100 $1,300 $2,500 

Required 
a. Identify each expense as fixed, variable, or mixed. 
b. Prepare a contribution margin income statement based on a volume of 5,000 windows. 
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