Question

The Alpine House, Inc., is a large retailer of snow skis. The company assembled the inform March 31: oints th 8 02:10:11 Sales Selling price per pair of skis Variable selling expense per pair of Variable administrative expense per Total fixed selling expense Total fixed administrative expense Beginning merchandise inventory Ending merchandise inventory Merchandise purchases Amount $ 1,271,000 $ 410 $. 49 $ 16 $ 140,000 $ 110,000 = $ 75,000 $ 115,000 $ 315,000 eBook 000k 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? Hint toe Complete this question by entering your answers in the tabs below. References Required 1 Required 2 Required 3 Prepare a traditional income statement for the quarter ended March 31. The Alpine House, Inc.

Answer 1

	Traditional income statement
	Sales		$1,271,000
	Less: Cost of Goods sold		$275,000	(75,000+315,000-115,000)
	Gross Profit		$996,000
	Selling and admin expenses
	Variable selling expense	$151,900		(1,271,000/410)*49
	Variable admin expense	$49,600		(1,271,000/410)*16
	Fixed selling expense	$140,000
	Fixed admin expense	$110,000	$451,500
	Net profit		$544,500
	Contribution Format Income Statement
	Sales		$1,271,000
	Less: Variable Cost of Goods sold		$275,000
	Gross contribution margin		$996,000
	Less : Variable marketing and admin expenses
	a) Variable selling expenses	$151,900
	b) Variable admin expenses	$49,600	$201,500
	Contribution Margin		$794,500
	Less: Fixed expenses
	a) Fixed Selling expense-	$140,000
	b) Fixed Admin expense	$110,000	$250,000
	Net Profit		$544,500
	Contribution Margin per unit	$32	(996,000/31,000)