Question

Saved The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ended March 31: $ Sales Selling price per pair of skis Variable selling expense per pair of skis Variable administrative expense per pair of skis Total fixed selling expense Total fixed administrative expense Beginning merchandise inventory Ending merchandise inventory Merchandise purchases $ $ Amount 861,000 410 50 17 135,000 110,000 70,000 120,000 310,000 $ $ $ 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 31 What was the contribution margin per unit? (Round your final answer to nearest whole dollar.) Contribution margin per unit Required 2 Required 3 )

Answer 1

	number of units sold = 861,000/410
			2100	units
1)		Traditional income statement
	Sales						861,000
	cost of goods sold		(70,000+310,000-120,000)				260000
	Gross profit						601,000
	Selling and administrative expense
	Selling expense		(50*2100+135,000)			240,000
	Administrative exp		(17*2100+110,000)			145,700
							385,700
	Net operating income						215,300
2)		Contribution Format income statement
	Sales						861,000
	Variable expenses
	cost of goods sold					260,000
	selling expense					105,000
	Administrativ expense					35,700
							400,700
	Contribution margin						460,300
	fixed expenses:
	Selling expenses					135,000
	Administrative expense					110,000
							245,000
	Net operating income						215,300
3)	contribution of each pair of skis was					219
	(460,300/2100)