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 $1,302,000 $ 420 $ $ 49 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 $ 16 $ 155,000 $ 100,000 $ 70,000 $ 110,000 $ 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 tabs below. Required Required Required 1 2 3 Prepare a traditional income statement for the quarter ended March 31. The Alpine House, Inc. Traditional Income Statement Selling and administrative expenses:

Answer 1

1)

Alpine House Inc

Traditional Format Income Statement

Sales	$ 1302000
Cost of goods sold	($275000)
Gross margin	$1027000
Selling and administrative expenses:
Selling expenses	($ 306900) (1)
Administrative expenses	($ 149600) (2)
Total selling and administrative expenses	($ 456500)
Net operating income	$ 570500

(1) Selling expenses = (3100*49) + 155000

(2) Administrative expenses = (3100*16) + 100000

2)

Alpine House Inc

Traditional Format Income Statement

Sales		$ 1302000
Less: Variable costs
Direct material used	$ 275000
Variable selling expenses	$ 151900
Variable administrative expenses	$ 49600
Total Variable Cost		($ 476500)
Contribution margin		$ 825500
Less: Fixed Costs
Fixed selling expenses	$ 155000
Fixed administrative expenses	$ 100000
Total Fixed Costs		($ 255000)
Net Income		$ 570500

3)

Contribution margin Per Unit = Contribution margin / Number of Unit

= $ 825500 / 3100

= $ 266.29