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	$	1,320,000
Selling price per pair of skis	$	440
Variable selling expense per pair of skis	$	46
Variable administrative expense per pair of skis	$	18
Total fixed selling expense	$	140,000
Total fixed administrative expense	$	130,000
Beginning merchandise inventory	$	75,000
Ending merchandise inventory	$	110,000
Merchandise purchases	$	310,000

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?

1)

The Alpine House, Inc. Traditional Income Statement Beginning merchandise inventory Selling and administrative expenses: 0

2)

3)

Contribution Margin per unit: ______

Answer 1

contribution Format Income statement Deisticalaus Ansonal im 8) Amount (ns) $ 13:20,000 Sales $275,000 $ 54,000 ( $4,67,1000) Variable epenses i - Cost of Goods Sold Selling expenses (3000 x $46) - Adwenastsative Expenses (3000+ $18) Contribution margin Cess fired Expenses: - Selling Expenses Adminstrative Expenses Net operating Income $8.53,000 $ 140000 $ 130ooo ($ 2,70,000) $ 5,83,000 Contribution per unit = Confoibution margin/No. of $853,000/3000 =$284.33 (.)) $285 skis