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 $1,200,000 400 45 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 $ $ $ $ $ 140,000 115,000 75,800 120,000 290,000 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 i 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 < Prev of 13 Nexfilm

Answer 1

Number of pair of skis sold	3000		=1200000/400
1
Traditional income statement
Sales		1200000
Cost of goods sold		245000	=75000+290000-120000
Gross margin		955000
Selling and administrative expenses:
Selling expenses	275000		=140000+(3000*45)
Administrative expenses	160000		=115000+(3000*15)
		435000
Net operating income		520000
2
Contribution format income statement
Sales		1200000
Variable expenses:
Cost of goods sold	245000
Selling expenses	135000		=3000*45
Administrative expenses	45000		=3000*15
		425000
Contribution margin		775000
Fixed expenses:
Selling expenses	140000
Administrative expenses	115000
		255000
Net operating income		520000
3
Contribution margin per unit	258		=775000/3000