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: 12.5 points ՄԴ Մ Մ Skipped Մ Amount $ 1,350,000 450 46 17 135,000 110,000 $ 80,000 $ 115,000 $ 315,000 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 Մ Մ Print 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.

Answer 1

Requirement 1

Alpine House Inc
Traditional Format Income Statement
Sales		$ 1,350,000.00
Cost of goods sold		$    280,000.00
Gross margin		$ 1,070,000.00
Selling and administrative expenses:
Selling expenses	$   273,000.00
Administrative expenses	$   161,000.00
Total selling and administrative expenses		$    434,000.00
Net operating income		$      636,000.00

Requirement 2

Alpine House Inc
Contribution margin Income statement
Sales		$ 1,350,000
Less: Variable costs
Direct material used	$ 280,000
Variable selling expenses	$ 138,000
Variable administrative expenses	$ 51,000
Total Variable cost		$ 469,000
Contribution margin		$ 881,000
Less: Fixed Costs
Fixed selling expenses	$ 135,000
Fixed administrative expenses	$ 110,000
Total Fixed Costs		$ 245,000
Net Income		$ 636,000

Requirement 3

Contribution margin per unit

$             293.67

Working

Sales	$ 1,350,000.00
Sales price	$             450.00
Units sold	3,000
Sales price	$             450.00
Variable material cost (280000/3000)	$               93.33
Variable selling expenses	$               46.00
Variable administrative expenses	$               17.00
Contribution margin [450-(93.33+46+17)]	$             293.67