Question

Exercise 19-8 Contribution margin format income statement LO P2 Polarix is a retailer of ATVS (all-terrain vehicles) and accessories. An income statement for its Consumer ATV Department for the current year follows. ATVS sell for $3,600 each. Variable selling expenses are $230 per ATV. The remaining selling expenses are fixed. Administrative expenses are 60 % variable and 40 % fixed. The company does not manufacture its own ATVS; it purchases them from a supplier for $1,880 each. POLARIX Income Statement-Consumer ATV Departnent For Year Ended December 31, 2017 $655,200 342,160 313,040 Sales Cost of goods sold Gross margin Operating expenses Selling expenses Administrative expenses $175,000 41,300 216,300 $96,740 Net income Required: 1. Prepare an income statement for this current year using the contribution margin format. (Round contribution margin per ATV to the nearest dollar amount.) POLARIX Income Statement Consumer ATV Department For Year Ended December 31, 2017 3 of 6 Next > <Prev

Answer 1

		Polarix
		Income statement
1)	Sales					655,200
	less:Variable expenses
	Variable cost of goods sold				342,160
	Variable selling expenses				41860
	Variable administrative expenses				24780
	total variable expenses					408,800
	Contribution margin					246,400
	less:Fixed expenses
	Fixed selling expenses				133140
	Fixed administrative expenses				16520
	Total fixed expenses					149660
	Net income (loss)					96,740
2)	Contribution margin per ATV					1354