Question

CISE 1-15 Traditional and Contribution Format Income Statements LO1-6 Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ended March 31: Amount 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........... $150,000 $750 $50 $10 $20,000 $20,000 $30,000 $40,000 $100,000 Required: 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 Cost of Goods sold Gross Margin $150,000 | $ 90,000 $ 60,000 Selling and administrative, Exponses Selling Expresse. - $30,000 Administrative expenses $82,000 $ 52,670 Net operating in come $ 8,0to Contuubution formał Opcome Statement Sales $150,000 I Variable Expensest Cost of Goods sold $ 90,000 Selling Expenses (800 x 450)| $10,000 Administrative expenses (400x810) $2,000 $ 102,00 Contribution margin $48.000 fired Expenses, Selling expenses $ 20,000 Administrative expenses $ 20,000 $40,000 $8.000 I Net operating income
3. Contribution Margin Per Unit = Contribution Margin/ No. Of units

Contribution Margin Per Unit = $48,000 / 200 = $240

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