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25 Oct 2017
EXERCISE 2-13 Traditional and Contribution Format Income Statements [LO2-6] 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 $150,000 $750 $50 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 ... $10 $20,000 $20,000 $30,000 $40,000 $100,000 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 toward fixed expenses and profits for each pair of skis sold during the quarter? (State this figure in a single dollar amount per pair of skis.)
EXERCISE 2-13 Traditional and Contribution Format Income Statements [LO2-6] 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 $150,000 $750 $50 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 ... $10 $20,000 $20,000 $30,000 $40,000 $100,000 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 toward fixed expenses and profits for each pair of skis sold during the quarter? (State this figure in a single dollar amount per pair of skis.)
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Related questions
Problem 1-19 Traditional and Contribution Format IncomeStatements [LO1-6]
Todrick Company is a merchandiser that reported the followinginformation based on 1,000 units sold:
| Sales | $ | 285,000 |
| Beginning merchandise inventory | $ | 19,000 |
| Purchases | $ | 190,000 |
| Ending merchandise inventory | $ | 9,500 |
| Fixed selling expense | $ | ? |
| Fixed administrative expense | $ | 11,400 |
| Variable selling expense | $ | 14,250 |
| Variable administrative expense | $ | ? |
| Contribution margin | $ | 57,000 |
| Net operating income | $ | 17,100 |
Required:
1. Prepare a contribution format income statement.
2. Prepare a traditional format income statement.
3. Calculate the selling price per unit.
4. Calculate the variable cost per unit.
5. Calculate the contribution margin per unit.
6. Which income statement format (traditional format orcontribution format) would be more useful to managers in estimatinghow net operating income will change in responses to changes inunit sales?
Prepare a contribution format income statement.
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