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:

The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ended March 31: ਦੀ Amount $1.032,000 430 ਦੀ 46 ਬੀ ਦੀ Total sales revenue 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 $ $ $ $ $ 20 150,000 100,000 70,000 115,000 280,000 Required: 1. Prepare a traditional income statement for the quarter ended March 31. The Alpine House, Inc. Traditional Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: $ 1,032,000 235,000 797,000 Net operating income

Answer 1

	Alpine House
	Traditional Income statement
	Sales		$ 10,32,000
Less:	Cost of goods sold		$   2,35,000
	Gross Profit		$   7,97,000
Less:	Selling and administrative expenses
	Selling Expense [(2400 units X $46) + $150000]	$ 2,60,400
	Advertising expense [(2400 units X $20) + $100000]	$ 1,48,000
			$   4,08,400
	Net operating Income		$   3,88,600
	Workings:
	Selling units	=	$1032000 / $430
		=	2,400
	Cost of goods sold	=	Beginning inventory + Purchases - Ending Inventory
		=	$70,000 + $280,000 - $115000
		=	$   2,35,000
	Alpine House
	Contribution Income statement
	Sales		$ 10,32,000
Less:	Variable cost
	Cost of goods sold	$ 2,35,000
	Selling Expense (2400 units X $46)	$ 1,10,400
	Advertising expense (2400 units X $20)	$     48,000
	Total Variable cost		$   3,93,400
	Contribution margin		$   6,38,600
Less:	Fixed expenses
	Selling Expense	$ 1,50,000
	Advertising expense	$ 1,00,000
			$   2,50,000
	Net operating Income		$   3,88,600
	Workings:
	Selling units	=	$1032000 / $430
		=	2,400
	Cost of goods sold	=	Beginning inventory + Purchases - Ending Inventory
		=	$70,000 + $280,000 - $115000
		=	$   2,35,000
3	Contribution margin per unit	=	Total Contribution / Selling units
		=	$638600 / 2400 units
		=	$             266

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