The 4 x4 Shop is a large retailer of equipment for pickup trucks. An for the com
ID: 2513864 • Letter: T
Question
The 4 x4 Shop is a large retailer of equipment for pickup trucks. An for the company's bed liner department for the most recent quarter 1. income statement is presented below: The 4 X 4 Shop Income Statement - Liner Department For First Quarter of Current Year Sales Less cost of goods sold. Gross margin $700,000 250,000 $450,000 Less operating expenses: Selling expenses... $195,000 Administrative expenses... 145,000 340,000 $110,000 Net income The liners sell, on average, for $350 each. The department's variable selling expenses are $35 per liner sold. The remaining selling expenses are fixed. The administrative expenses are 25% variable and 75% fixed. The company purchases its liners from a supplier at a cost of $125 per liner. Required: Show work! Prepare an income statement for the quarter, using the contribution approach.Explanation / Answer
Income Statement
For the first Quarter of the Current Year
Sales $7,00,000
Less:
Material costs $2,50,000
Varable Selling expenses $ 70,000
Variable admin expenses $36,250
Contirbution $3,43,750
Less:
Fixed selling expenses $1,25,000
Fixd admin expsnses $1,08,750
Net Income $1,10,000
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