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: Amount $1,032,000 430 47 16 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 $ 135,000 $ 125,000 $ 80,000 $ 115,000 $ 315,000 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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

solution

Alpine House Inc
Traditional Format Income Statement
Sales		$ 1,032,000
Cost of goods sold		$ 280,000
Gross margin		$ 752,000
Selling and administrative expenses:
Selling expenses	$ 247,800*
Administrative expenses	$ 163,400**
Total selling and administrative expenses		$ 411,200
Net operating income		$ 340,800

*(2400*47)+135000

**(2400*16)+125000

.

Alpine House Inc
Contribution margin Income statement
Sales		$ 1,032,000
Less: Variable costs
Direct material used	$ 280,000
Variable selling expenses	$ 112,800
Variable administrative expenses	$ 38,400
Total Variable cost		$ 431,200
Contribution margin		$ 600,800
Less: Fixed Costs
Fixed selling expenses	$ 135,000
Fixed administrative expenses	$ 125,000
Total Fixed Costs		$ 260,000
Net Income		$ 340,800

.

Contribution margin

$     250.33 or 250

Working

Sales price	$     430.00
Variable material cost (280000/2400)	$     116.67
Variable selling expenses	$       47.00
Variable administrative expenses	$       16.00
Contribution margin (430-116.67-47-16)	$     250.33