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 984,000 410 46 19 145,000 105,000 65,000 115,000 315,000 $ 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 ta os below. Required 1 Required 2 Required 3 Prepare a traditional income statement for the quarter ended March 31. The Alpine House, Inc. Traditional Income Statement Selling and administrative expenses: CUTE Required 2 >

Answer 1

1. Prepare a Traditional Income Statement for the Quarter Ended March 31 The Alpine Inc., Traditional Income Statement Particulars Calculation Sales Given Less : Cost of goods sold $ 65,000 + $ 315,000 - $ 115,000 Gross Profit Less : Selling and Administrative Expenses Variable Selling Expenses 2,400 Skis @ $ 46 $ 1,10,400 Variable Administation Expenses 2,400 Skis @ $ 19 45,600 Fixed Selling Expenses Given $ 1,45,000 Fixed Adminstration Expenses Given $ 1,05,000 Net Income Amount ($) $ 9,84,000 $ 2,65,000 $ 7,19,000 $ $ 4,06,000 3,13,000 No. of Skis Sold = $ 984,000 / 410 = 2,400 skis Cost of goods sold = Beginning Inventory + Purchases - Ending Inventory Amount ($) $ 9,84,000 2. Prepare a Contribution Format Income Statement for the Quarter Ended March 31 The Alpine Inc., Traditional Income Statement Particulars Calculation Sales Given Less : Variable Expenses Cost of goods sold $ 65,000 + $ 315,000 - $ 115,000 $ 2,65,000 Selling Expenses 2,400 Skis @ $ 46 $ 1,10,400 Administrative Expenses 2,400 Skis @ $ 19 $ 45,600 Contribution Less : Fixed Expenses Selling Expenses Given $ 1,45,000 Administrative Expenses Given $ 1,05,000 Net Income $ 4,21,000 $ 5,63,000 $ $ 2,50,000 3,13,000 3. What was the Contribution per Unit? Contribution per Unit = Total Contribution / No. of Skis Contribution per Unit = $ 563,000 / 2,400 Skis Contribution per Unit = $ 235 per Unit