Question

The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ended March 31 Amount Total sales revenue 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 fioxed administrative expense Beginning merchandise inventory Ending merchandise inventory Merchandise purchases $1,419,000 $430 49 17 S 160,000 S 105,000 S 80,000 S 100,000 s 290,000 Required: 1. Prepare a traditional income statement for the quarter ended March 31 The Alpine House, Inc. Traditional Income Statement 1,419,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Selling expenses Administrative expenses Net operating income

Answer 1

Units sold	3300		=1419000/430
1
Traditional income statement
Sales		1419000
Cost of goods sold		270000	=290000+80000-100000
Gross margin		1149000
Selling and administrative expenses:
Selling expenses	321700		=160000+(3300*49)
Administrative expenses	161100		=105000+(3300*17)
		482800
Net operating income		666200
2
Contribution format income statement
Sales		1419000
Variable expenses:
Cost of goods sold	270000
Selling expenses	161700		=3300*49
Administrative expenses	56100		=3300*17
		487800
Contribution margin		931200
Fixed expenses:
Selling expenses	160000
Administrative expenses	105000
		265000
Net operating income		666200
3
Contribution of each pair of skis	282		=931200/3300