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e Edit View History Bookmarks Develop Window Help newconnect.mhedu Assignments: ACCT-2020-30 Exercise 1-15 Traditional and Contribution Format Income Statements [LO1-6) The Alpine House. inc, is a large retailer or snoww skis. The company assembied the intormation shown below for the quarter ended March Anount $1,280,000 Sales Selling price per pair of skis variable selling expense per pair of skis variable administrative expense per pair of akis Total fixed selling expense Total fixed administrative expense Beginning merchandise inventory Ending merchandise inventory Nerchandise parchases 400 16 $ 150,000 $ 125, 000 65,000 110,006 290,000 ces 1 Prepare a tracitional income statement tor the quarter ended March 3t 2 Prepare a contibution format income stacemenn for the quarter ended March 3 What was the corrbution margin per unit? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a traditionalincome statement for the quanter ended March 31 ncome statement for the quarter ended March 31 Required 2> JAN 16

Solution

Answer

a.

Detail $

Net $

Sales (3,000 Units @ $400 per unit)

1,200,000

Less: Cost of Goods Sold

(245,000)

Gross Margin

955,000

Selling and Administrative Expenses

Selling Expenses

294,000

Administrative Expenses

173,000

Total Selling and Administrative Expenses

(467,000)

Net Operating Income

488,000

Cost of Goods Sold = Beginning Inventory + Purchases - Closing Inventory

= 65,000 + 290,000 – 110,000

Cost of Goods Sold = 245,000

Selling Expenses = Fixed Selling Expenses + Variable Selling Expenses

= 150,000 + ($48 * 3,000 Pairs)

Selling Expenses = 294,000

Administrative Expenses = Fixed Administrative Expenses + Variable Administrative Expenses

= 125,000 + ($16 * 3,000 Pairs)

Administrative Expenses = $173,000

b.

Detail $

Net $

Sales (3,000 Units @ $400 per unit)

1,200,000

Less: Variable Expenses

Cost of Goods Sold

245,000

Selling Expenses ($48 * 3,000 Pairs)

144,000

Administrative Expenses

($16 * 3,000 Pairs)

48,000

Total Variable Selling and Administrative Expenses

(437,000)

Contribution Margin

763,000

Fixed Expenses

Selling Expenses

150,000

Administrative Expenses

125,000

Total Fixed Selling and Administrative Expenses

(275,000)

Net Operating Income

488,000

c.

Contribution Margin Per Unit = Contribution Margin / No. of Units Sold

= 763,000 / 3,000 Units

= 254.33 per unit

Contribution Margin Per Unit = $254 per unit

a.
	Detail $	Net $
Sales (3,000 Units @ $400 per unit)		1,200,000
Less: Cost of Goods Sold		(245,000)
Gross Margin		955,000
Selling and Administrative Expenses
Selling Expenses	294,000
Administrative Expenses	173,000
Total Selling and Administrative Expenses		(467,000)
Net Operating Income		488,000