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It's almost Valentine's Day and Pastry Garden is gearing up. This year they are offering gift...

It's almost Valentine's Day and Pastry Garden is gearing up. This year they are offering gift baskets at a cost of $125. The variable cost is $60. Pastry Garden pays salaries of $1,300 and the store rent is $1,000 per month. There is also a sales commission of 5% of the sales price. They expect to sell 140 gift baskets.

Using Excel, create a traditional income statement and a contribution margin income statement

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Pastry Garden Traditional income statement Particulars Sales Details Amount a Gift baskets per Unit 125.00 140 No of Units c Sales (a*b) d Sales commision (c*596) e Net sales (c-d) $ 17,500.00 $875.00 $16,625.00 Varible cost f Gift baskets per Unit S g Variable cost (b*f) $ 8,400.00 $ 8,225.00 Gross profit (e-g) Less Fixed cost salaries Rent $ 1,300.00 $ 1,000.00 ITotal fixed cost (j+k) m Net income (h-l) $ 2,300.00 $ 5,925.00

contribution margin income statement Sales a Sales per unit b Less commision (a*596) c Net Sales (a-b) d Varible cost 125.00 S 6.25 118.75 60.00 $ 58.75

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