Homework SourseThe Alpine House Inc is a large retailer of snow skis The co
The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ended March 31:
Required:
1. Prepare a traditional income statement for the quarter ended March 31.
2. Prepare a contribution format income statement for the quarter ended March 31.
3. What was the contribution margin per unit?
| Amount | ||
| Sales | $ | 1,188,000 |
| Selling price per pair of skis | $ | 440 |
| Variable selling expense per pair of skis | $ | 47 |
| Variable administrative expense per pair of skis | $ | 15 |
| Total fixed selling expense | $ | 155,000 |
| Total fixed administrative expense | $ | 100,000 |
| Beginning merchandise inventory | $ | 75,000 |
| Ending merchandise inventory | $ | 115,000 |
| Merchandise purchases | $ | 305,000 |
Solution
1. Prepare a traditional income statement for the quarter ended March 31.
2. Prepare a contribution format income statement for the quarter ended March 31.
3. Contribution margin per unit = 755600/2700 = 279.85 per unit
| Sales | 1188000 | |
| Cost of goods sold | (265000) | |
| Gross profit | 923000 | |
| Selling expenses | (281900) | |
| Administrative expenses | (140500) | (422400) |
| Net operating income | 500600 | |
