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 $ 1,364,000 440 50 18 155,000 $ 105,000 $ 80,000 $ 115,000 $ 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? The Alpine House, Inc. Traditional Income Statement Selling and administrative expenses: The Alpine House, Inc. Contribution Format Income Statement Variable expenses: Fixed expenses: Contribution margin per unit

Answer 1

Answer 1

Particulars
Sales	$ 1,364,000
Less:- Cost of Goods Sold	$     265,000
Gross Profit		$ 1,099,000
Selling and Administrative Expenses:-
Selling Expense	$     310,000
Administrative Expense	$     160,800
Total Selling and Administrative Expenses		$     470,800
Net Operating Income		$     628,200

Answer 2

Particulars
Sales		$ 1,364,000
Variable Expenses:-
Cost of Goods Sold	$     265,000
Variable Selling Expense	$     155,000
Variable Administrative Expense	$       55,800
Total Variable Expenses		$     475,800
Contribution Margin		$     888,200
Fixed Expenses:-
Total Fixed selling Expense	$     155,000
Total Fixed Administrative Expenses	$     105,000
Total Fixed Expenses		$     260,000
Net Operating Income		$     628,200

Answer 3

Contribution Margin per unit

$ 286.52

Calculations:

с D Amount Amount 1364000 =80000+300000-115000 =C2-C3 oo wawe wn =155000+(1364000/440*50) =105000+(1364000/440*18) =C6+C7 =D4-D8 12 =C2 13 A 1 Answer Particulars Sales Less:- Cost of Goods Sold Gross Profit Selling and Administrative Expenses:- Selling Expense Administrative Expense Total Selling and Administrative Expenses 9 Net Operating Income 10 11 2 Particulars Sales Variable Expenses:- 14 Cost of Goods Sold Variable Selling Expense 16 Variable Administrative Expense 17 Total Variable Expenses 18 Contribution Margin 19 Fixed Expenses:- 20 Total Fixed selling Expense Total Fixed Administrative Expenses 22 Total Fixed Expenses 23 Net Operating Income 24 25 3 Contribution Margin 26 Units 27 Contribution Margin per unit 15 =C3 =1364000/440*50 =1364000/440*18 =C16+C15+C14 =D12-D17 155000 105000 21 =C20+C21 =D18-D22 888200 =1364000/440 =C25/C26

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