Question

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Exercise 1-15 Traditional and Contribution Format Income Statements (LO1-6] The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ended March 31: is as is Amount Sales $1,320,000 Selling price per pair of skis 440 Variable selling expense per pair of s skis Variable administrative expense per pair of skis Total fixed selling expense $ 155,000 Total fixed administrative expense $ 105,000 Beginning merchandise inventory $ 60,000 Ending merchandise inventory $ 110,000 Merchandise purchases $ 295,000 es 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 Required Required 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

Requirement 1
Alpine House, Inc
Traditional Income statement
For the quarter ended March 31
Sales Revenue		1320000
Cost of goods sold:
Beginning Merchandise Inventory	60000
Merchandise Purchases	295000
Total goods available for sale	355000
Less: Ending merchandise Inventory	-110000	245000
Gross Profit		1075000
Variable selling expense per pair of skis	138000
Total Fixed selling expense	155000
Variable administrative expense per pair of skis	51000
Total Fixed administrative expense	105000
Total Selling and administrative costs		449000
Net operating Income		626000
Requirement 2
Alpine House, Inc
Contribution format Income statement
For the quarter ended March 31
Sales Revenue		1320000
Variable costs:
Beginning Merchandise Inventory	60000
Merchandise Purchases	295000
Total goods available for sale	355000
Less: Ending merchandise Inventory	-110000
Cost of goods sold		245000
Variable selling expense per pair of skis		138000
Variable administrative expense per pair of skis		51000
Total Variable costs		434000
Contribution Margin		886000
Fixed costs:
Total Fixed selling expense	155000
Total Fixed administrative expense	105000
Total Fixed costs		260000
Net operating Income		626000
Requirement 3
Contribution margin per unit		295
(886,000/(1,320,000/440)