Polarix is a retailer of ATVs (all-terrain vehicles) and accessories. An income statement for its Consumer ATV Department for the current year follows. ATVs sell for $3,800 each. Variable selling expenses are $270 per ATV. The remaining selling expenses are fixed. Administrative expenses are 40% variable and 60% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,830 each. POLARIXIncome Statement—Consumer ATV DepartmentFor Year Ended December 31, 2017Sales $646,000 Cost of goods sold 311,100 Gross margin 334,900 Operating expenses Selling expenses$135,000 Administrative expenses 59,500 194,500 Net income $140,400 Required:1. Prepare an income statement for this current year using the contribution margin format. (Do not round intermediate calculations. Round contribution margin per ATV value to the nearest whole number.)

Income Statement: The income statement is an economic statement which measures the financial…

Answered: Polarix is a retailer of ATVs…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Polarix is a retailer of ATVs (all-terrain vehicles) and accessories. An income statement for its Consumer ATV Department for the current year follows. ATVs sell for $3,800 each. Variable selling expenses are $270 per ATV. The remaining selling expenses are fixed. Administrative expenses are 40% variable and 60% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,830 each.

POLARIX Income Statement—Consumer ATV Department For Year Ended December 31, 2017
Sales			$	646,000
Cost of goods sold				311,100
Gross margin				334,900
Operating expenses
Selling expenses	$	135,000
Administrative expenses		59,500		194,500
Net income			$	140,400

Required:

1. Prepare an income statement for this current year using the contribution margin format. (Do not round intermediate calculations. Round contribution margin per ATV value to the nearest whole number.)

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