Question

weet Ice Cream Shoppe sold 9,600 servings of ice cream during June for $4 per serving. The shop purchases the ice cream in large tubs from the Amazing Ice Cream Company. Each tub costs the shop $9 and has enough ice cream to fill 20 ice cream cones. The shop purchases the ice cream cones for $0. 15 each from a GF local warehouse club. Located in an outdoor mall, the rent for the shop space is $1.750 per month. The shop expenses $230 a month for the depreciation of the shop's furniture and equipment. During June, the shop incurred an additional S2.500 of other operating expenses (75% of these were fred costs) Use a Requirements 1. Prepare The Sweet Ice Cream Shoppe's June incomfe statement using a traditional format 2. Prepare The Sweet Ice Cream Shoppe's June income statement using a contribution margin format. Requirement 1. Prepare The Sweet Ice Cream Shoppe's June income statement using a traditional format. The The Sweet Ice Cream Shoppe Income Statement For the Month Ended June 30 Ice C Less

Answer 1

	The Sweet Ice Cream Shoppe
	Traditional format Income statement
	For the month ended June 30
	Sales (9,600 servings X $4)		$       38,400
Less:	Cost of goods sold [(9,600 servings / 20) X $9] + [9,600 servings X $0.15]		$         5,760
	Gross Profit		$       32,640
Less:	Operating expense
	Rent	$       1,750
	Shop expense	$           230
	Other Operating expenses	$       2,500
	Total operating expense		$         4,480
	Net Income		$       28,160
	The Sweet Ice Cream Shoppe
	Contribution format Income statement
	For the month ended June 30
	Sales (9,600 servings X $4)		$       38,400
Less:	Variable cost
	Cones (9,600 servings X $0.15)	$       1,440
	Ice cream [(9,600 servings / 20) X $9]	$       4,320
	Other Operating expenses ($2,500 X 25%)	$           625
	Total Variable cost		$         6,385
	Contribution margin		$       32,015
Less:	Fixed cost
	Rent	$       1,750
	Shop expense	$           230
	Other Operating expenses ($2,500 X 75%)	$       1,875
	Total Fixed cost		$         3,855
	Net Income		$       28,160