Question

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
Total sales revenue	$	1,100,000
Selling price per pair of skis	$	440
Variable selling expense per pair of skis	$	49
Variable administrative expense per pair of skis	$	17
Total fixed selling expense	$	150,000
Total fixed administrative expense	$	130,000
Beginning merchandise inventory	$	70,000
Ending merchandise inventory	$	110,000
Merchandise purchases	$	290,000

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?

     

Answer 1

Units sold = 1100000/440 = 2500 1100000 250000 850000 The Alpine House Inc Traditional Income Statement sales Revneue Cost of Goods Sold Gross Margin selling and Administrative Expenses Selling Expenses Selling Expenses (2500*49)+150000 272500 Administrative Expenses (2500*17)+130000 172500 Total Selling and Administrative Expenses Net operating income 445000 405000 Beginning inventoy Add: Purchases Less: Ending invenotry Cost of Goods sold 70000 290000 110000 250000

1100000 The Alpine House Inc Contribution Formate Income Statement sales Revneue Varaible Expenses Cost of Goods Sold 250000 Selling Expenses 122500 Administrative Expenses 42500 Total Variable Expenses Contribution Margin Fixed Expenses Selling Expenses 150000 Administrative Expenses 130000 Total Fixed Cost Net operating Income 415000 685000 280000 405000 Selling Price Per unit Variable Cost per unit =420000/2500 contribution Margin per Units 440 166 274