Question

The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter en March 31: Amount $ 1,204,000 430 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 $ $ $ $ $ 130,000 125,000 65,000 110.000 300,000 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 3 Prepare a traditional income statement for the quarter ended March 31. The Alpine House, Inc. Traditional Income Statement Selling and administrative expenses

Answer 1

Solution 1:

Nos of units sold = $1,204,000 / 430 = 2800 units

Alpine House Inc.
Absorption costing income statement For the quarter ended March 31
Particulars	Details	Amount
Sales		$1,204,000.00
Cost of goods sold ($65,000 + $300,000 - $110,000)		$255,000.00
Gross Profit		$949,000.00
Selling & Administrative expenses:
Variable selling expenses	$131,600.00
Variable administrative expenses	$50,400.00
Fixed Selling expenses	$130,000.00
Fixed Administrative expenses	$125,000.00
Total Selling & Administrative expenses		$437,000.00
Net Operating Income		$512,000.00

solution 2:

Alpine House Inc.
Variable costing income statement For the quarter ended March 31
Particulars		Amount
Sales		$1,204,000.00
Variable Cost:
Variable cost of goods sold ($65,000 + $300,000 - $110,000)	$255,000.00
Variable selling expenses	$131,600.00
Variable administrative expenses	$50,400.00
Total Variable Costs		$437,000.00
Contribution Margin		$767,000.00
Fixed Costs:
Fixed Selling expenses	$130,000.00
Fixed Administrative expenses	$125,000.00
Total Fixed Expenses		$255,000.00
Net Income		$512,000.00

Solution 3:

Contribution margin per unit = $767,000 / 2800 = $273.93 per unit