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 $ 1,066,000 410 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 46 20 es es es eses $ $ $ $ 130,000 125,000 65,000 110,000 285,000 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a traditional income statement for the quarter ended March 31. The Alpine House, Inc. Traditional Income Statement Selling and administrative expenses: < Required 1 Required 2 >

Answer 1

Requirement: 1 The Alpine House, Inc. Traditional Income statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses 1066000 240000 826000 249600 177000 Total selling and administrative expenses Net operating income 4266000 399400

1066000 Requirement: 2 The Alpine House, Inc. Contribution format Income statement Sales Variable Expenses: Cost of goods sold Selling expenses (units sold * Selling price per unit) administrative expenses Total variable expenses Contribution margin Fixed Expenses: Selling expenses Administrative expenses Total Fixed expenses Net Operating Income 240000 119600 52000 411600 654400 130000 125000 255000 399400 Requirement: 3 Contribution margin per unit = Total contribution / Number of units sold Total contribution Number of units sold Contribution margin per unit 654400 2600 252

Working Notes for Cost of goods sold Cost of goods sold Beginning merchandise inventory Add: Merchandise purchased Subtotal Less: Ending merchandise inventory Cost of goods sold 65000 285000 350000 110000 240000