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: Ꮎ Ꮎ Total sales revenue 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 Amount $1,189,000 $ 410 $ 47 18 $ 140,000 $ 110,000 $ 60,000 $ 105,000 $ 290,000 Ꮎ Required: 1. Prepare a traditional income statement for the quarter ended March 31. The Alpine House, Inc. Traditional Income Statement Sales $ 1,189,000 Cost of goods sold Gross margin Selling and administrative exp Selling expenses Administrative expenses This is a numeric cell, so please enter numbers only. Net operating income

Answer 1

1. Traditional income Statement

Sales	$1,189,000
Cost of Goods sold	$245,000
Gross Margin	$944,000
Selling and admin exp
Selling exp	$276,300
Admin exp	$162,200
Net operating income	$505,500

2. Contribution Format Income statement

Sales	$1,189,000
Variable exp:
Cost of Goods sold	$245,000
Selling exp	$136,300
Admin exp	$52,200
Contribution margin	$755,500
Fixed Exp:
Selling exp	$140,000
Admin exp	$110,000
Net operating income	$505,500

3. Contribution for each pair of skis is $260.52 ($755500/2900)

No. of skis= (Sales/ Selling price per skis)

=(1189000/410)

=2900