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: 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 Amount 880,000 440 50 16 130,000 120,000 70,000 110,000 285,000 $ $ $ 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?

Answer 1

The Alpine House Inc Traditional Income Statement sales Revneue Cost of Goods Sold Gross Margin selling and Administrative Expenses Selling Expenses Selling Expenses (2000*50+130000) Administrative Expenses (2000*16+120000) Total Selling and Administrative Expenses Net operating income 880000 245000 635000 230000 152000 382000 253000 Beginning inventoy Add: Purchases Less: Ending invenotry Cost og Goods sold 70000 285000 110000 245000

The Alpine House Inc Contribution Formate Income Statement sales Revneue Varaible Expenses Cost of Goods Sold Selling Expenses Administrative Expenses Total Variable Expenses Contribution Margin Fixed Expenses Selling Expenses Administrative Expenses Total Fixed Cost Net operating Income 880000 245000 100000 32000 377000 503000 130000 120000 250000 253000 Selling Price Per unit Variable Cost per unit 377000/2000 contribution Margin per Units 440 188.50 252