Question

er ended The Alpine House, Inc., Is a large retailer of snow skis. The company assembled the information shown below for the quan March 31 Amount s150,eee s 758 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 1e $ 20,eee $ 28,8ee $ 30,0ee $ 48,e80 s 10e,eee 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 1Required 2 Required 3

Answer 1

	number of units sold = 150,000/750
			200	units
1)		Traditional income statement
	Sales						150,000
	cost of goods sold		(30,000+100,000-40,000)				90000
	Gross profit						60,000
	Selling and administrative expense
	Selling expense		(200*50+20,000)			30,000
	Administrative exp		(200*10+20,000)			22,000
							52,000
	Net operating income						8,000
2)		Contribution Format income statement
	Sales						150,000
	Variable expenses
	cost of goods sold					90,000
	selling expense					10,000
	Administrativ expense					2,000
							102,000
	Contribution margin						48,000
	fixed expenses:
	Selling expenses					20,000
	Administrative expense					20,000
							40,000
	Net operating income						8,000
3)	contribution of each pair of skis was					240
	(48,000/200units)