1 answer

The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information...

Question:

The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter e
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 $ 1,204,000 430 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 16 150,000 110,000 65,000 110,000 300,000 $ $ 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?

Answers

number of units sold = 1,204,000/430
2800 units
1) Traditional income statement
Sales 1,204,000
cost of goods sold (65,000+300,000-110,000) 255000
Gross profit 949,000
Selling and administrative expense
Selling expense (46*2800+150,000) 278,800
Administrative exp (16*2800+110,000) 154,800
433,600
Net operating income 515,400
2) Contribution Format income statement
Sales 1,204,000
Variable expenses
cost of goods sold 255,000
selling expense 128,800
Administrativ expense 44,800
428,600
Contribution margin 775,400
fixed expenses:
Selling expenses 150,000
Administrative expense 110,000
260,000
Net operating income 515,400
3) contribution of each pair of skis was 277
(775400/2800)
.

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