Question

Help Save 2 Exercise 1-15 Traditional and Contribution Format Income Statements [LO1-6] The Alpine House, Inc. is a large fåtaller of snow skls. The company assembled the information shown below for the quarter ended March 31: Oints eBook 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 adeinistrative expense Beginning merchandise inventory Ending merchandise inventory Merchandise purchases Amount $ 150,000 S 750 $ 50 $ 10 $ 20,000 $ 20,000 $ 30,000 $ 40,000 $100,000 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.

Answer 1

Answer:

Traditional Income Statement for the quarter ended 31st March

1)	No. of Units		200	units
		( = Total Sales/ rate per unit)
		( 150000 Sales/750 per unit)
		Particulars	Amount
			Sales	$	1,50,000
		Less	Cost of Goods sold	$	-90,000
			( opening inventory + purchases - closing inventory)
			(30000 + 100000 - 40000)
			Gross Profit	$	60,000
		Less	Marketing and administrative expenses
			(Both fixed and variable)
			1. Variable selling expenses	$	-10,000
			( $ 50 X 200 units)
			2. Variable Admin expenses	$	-2,000
			( $ 10 X 200 units)
			3. Fixed selling expenses	$	-20,000
			4. Fixed Admin Expenses	$	-20,000
			Net Profit		8000

Contribution Format Income Statement for the quarter ended 31st March

2)	No. of Units		200	units
		( = Total Sales/ rate per unit)
		( 150000 Sales/750 per unit)
	Particulars	Amount
		Sales	$	1,50,000
	Less	Variable cost
		1. Direct material cost	$	-90,000
		( opening inventory + purchases - closing inventory)
		(30000 + 100000 - 40000)
		2. Variable selling expenses	$	-10,000
		( $ 50 X 200 units)
		3. Variable Admin expenses	$	-2,000
		( $ 10 X 200 units)
		Contribution margin	$	48,000
	Less	Fixed cost
		1. Fixed selling expenses	$	-20,000
		2. Fixed Admin Expenses	$	-20,000
		Net Profit	$	8,000

3)	Contribution margin per unit                                        =	$	240
		(Total contribution / Total number of units)
		( 48000 / 200)