The Alpine House, Inc., is a large retailer of snow skis. The company assembled

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 $ 1,075,000 430 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 inventor Merchandise purchases 17 $ 145,000 $ 120,000 80,000 $ 105,000 $ 310,000 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 Slling and administrative expenses

Explanation / Answer

TRADITIONAL INCOME STATEMENT: Sales revenue 1075000 Less: Cost of Goods sold Beginning Inventory 80000 Add: Purchases 310000 Less: Ending Inventory -105000 Cost of Goods sold 285,000 Gross margin 790,000 Less: Selling and admin expense Variable selling expense (2500 units @ 50) 125000 Variable Admin Expense (2500 units @17) 42500 Fixed Selling expense 145000 Fixed Admin Expense 120000 Net Operating income 357500 Note: Number of units sold: Total sales/ Selling price: $1075,000 /430 = 2500 units CONTRIBUTION MARGIN INCOME STATEMENT Sales revenue 1075000 Les: Variable cost COGS 285000 Variable Sselling Expense 125000 Variable admin expense 42500 Contribution margin 622500 Less: Fixed cost Fixed selling expense 145000 Fixed admin expense 120000 Net operating income 357500 Contribution per unit: Total contribution earned/ Number of units sold = $622,500/2500 = $ 249 per unit

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