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
Sales	$	1,440,000
Selling price per pair of skis	$	450
Variable selling expense per pair of skis	$	47
Variable administrative expense per pair of skis	$	18
Total fixed selling expense	$	160,000
Total fixed administrative expense	$	115,000
Beginning merchandise inventory	$	75,000
Ending merchandise inventory	$	115,000
Merchandise purchases	$	285,000

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?

Prepare a traditional income statement for the quarter ended March 31.

	The Alpine House, Inc. Traditional Income Statement Salesselected answer correct $1,440,000 Cost of goods soldselected answer correct Gross marginselected answer correct Selling and administrative expenses: Selling expensesselected answer correct Administrative expensesselected answer correct not attempted not attempted    Net operating incomeselected answer correct

• Prepare a traditional income statement for the quarter ended March 31.

  	The Alpine House, Inc. Traditional Income Statement Salesselected answer correct $1,440,000 Cost of goods soldselected answer correct Gross marginselected answer correct Selling and administrative expenses: Selling expensesselected answer correct Administrative expensesselected answer correct not attempted not attempted    Net operating incomeselected answer correct

• What was the contribution margin per unit? (Round your final answer to nearest whole dollar.)

  	Contribution margin per unit

Answer 1

The Alpine House, Inc.
Traditional Income Statement
for the quarter ended March 31.
Particulars	Amount in $	Amount in $
Sales		$14,40,000
Less: Cost of goods sold		-$2,45,000
Gross Margin		$11,95,000
Less: Selling and administrative expenses:
Variable Selling Expense	$1,50,400
Variable Administrative Expense	$57,600
Fixed Selling Expense	$1,60,000
Fixed Administrative Expense	$1,15,000
Total Selling and administrative expenses		$4,83,000
Net Income		$7,12,000

Sales	$14,40,000
Selling price per pair of skis	$450
Sales in units	$14,40,000 / $ 450 = 3200 units

	Per pair of skis	for 3200 pair of skis
Variable selling expense	$47	$1,50,400
Variable administrative expense	$18	$57,600

Cost of goods sold = Opening stock + Purchases - Closing stock

= $75,000 + $285,000 - $115,000

= $245,000