Question

The Old Tyme Ice Cream Shoppe sold 9,600 servings of ice cream during June for $2 per serving. Old Tyme purchases the ice cream in large tubs from the Dream Ice Cream Company. Each tub costs Old Tyme $9 and has enough ice cream to fill 15 ice cream cones. Old Tyme purchases the ice cream cones for $0.05 each from a local warehouse club. The Old Tyme Ice Cream Shoppe is located in a local strip mall, and rent for the space is $2,000 per month. Old Tyme expenses $260 a month for the depreciation of the Shoppe's furniture and equipment. During June, Old Tyme incurred an additional $2,400 of other operating expenses (75% of these were fixed costs). Requirements 1. Prepare Old Tyme's June income statement using a traditional format. 2. Prepare Old Tyme's June income statement using a contribution margin format. Requirement 1. Prepare Old Tyme's June income statement using a traditional format. The Old Tyme Ice Cream Shoppe Income Statement For the month ended June 30 Operating expenses:

Answer 1

Income Statement Ans 1 For the Month Ended June 30 19200 (9600 x $ 2) Sales Revenue Note-01 Computation of COGS: 5760 (9600 Servings*9/15) Less Cost of Goods Sold Icecream Cost 6240 Note-01 Gross Profit 12960 Cones Cost 480 9600x 0.05 Operating Expenses 6240 2000 Rent Depreciation 260 Other Operating Expenses 2400 Total Operating Expenses 4660 Net Profit 8300 Ans 2 Income Statement For the Month Ended June 30 19200 (9600 x$ 2) Sales Revenue Less Variable Expenses Cost of Goods Sold 6240 Other Operating Expenses 600 (2400 x 25%) Contribution 12360 Fixed Expenses Rent 2000 Depreciation 260 Other Operating Expenses Total Fixed Expenses 1800 4060 Net Profit 8300