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The Alpine House, Inc. is a large retailer of winter sports equipment. Here is an income statement for the company's Ski department for a recent quarter: THE ALPINE HOUSE, INC. Income Statement-Ski Department For the Quarter Ended March 31 Sales Less: Cost of goods sold Gross margin Less: Operating expenses: Selling expenses Administrative expenses Net income $ 60,000 20,000 $ 560,000 390,000 170,000 80,000 $ 90,000 On average, skis sell for $800 per pair. Variable selling expenses are $50 per pair of skis sold. The remaining selling expenses are fixed. The administrative expenses are 17.5 % variable and 82.5% fixed. The company does not manufacture its own skis; it purchases them from a supplier for $450 per pair. Required: 1. Prepare a contribution margin income statement for the quarter. 2. For every pair of skis sold during the quarter, what was the contribution toward covering fixed expenses and toward earning profits?

The Alpine House, Inc. is a large retailer of winter sports equipment. Here is an income statement for the company's Ski department for a recent quarter: THE ALPINE HOUSE, INC. Income Statement-Ski Department For the Quarter Ended March 31 Sales Less: Cost of goods sold Gross margin Less: Operating expenses: Selling expenses Administrative expenses Net income $ 60,000 20,000 $ 560,000 390,000 170,000 80,000 $ 90,000 On average, skis sell for $800 per pair. Variable selling expenses are $50 per pair of skis sold. The remaining selling expenses are fixed. The administrative expenses are 17.5 % variable and 82.5% fixed. The company does not manufacture its own skis; it purchases them from a supplier for $450 per pair. Required: 1. Prepare a contribution margin income statement for the quarter. 2. For every pair of skis sold during the quarter, what was the contribution toward covering fixed expenses and toward earning profits?

FINANCIAL ACCOUNTING
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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The Alpine House, Inc. is a large retailer of winter sports equipment. Here is an income statement for the company's Ski department for a recent quarter: THE ALPINE HOUSE, INC. Income Statement-Ski Department For the Quarter Ended March 31 Sales Less: Cost of goods sold Gross margin Less: Operating expenses: Selling expenses Administrative expenses Net income $ 60,000 20,000 $ 560,000 390,000 170,000 80,000 $ 90,000 On average, skis sell for $800 per pair. Variable selling expenses are $50 per pair of skis sold. remaining selling expenses are fixed. The administrative expenses are 17.5% variable and 82.5% fixed. The company does not manufacture its own skis; it purchases them from a supplier for $450 per pair. Required: 1. Prepare a contribution margin income statement for the quarter. 2. For every pair of skis sold during the quarter, what was the contribution toward covering fixed expenses and toward earning profits?
Transcribed Image Text:The Alpine House, Inc. is a large retailer of winter sports equipment. Here is an income statement for the company's Ski department for a recent quarter: THE ALPINE HOUSE, INC. Income Statement-Ski Department For the Quarter Ended March 31 Sales Less: Cost of goods sold Gross margin Less: Operating expenses: Selling expenses Administrative expenses Net income $ 60,000 20,000 $ 560,000 390,000 170,000 80,000 $ 90,000 On average, skis sell for $800 per pair. Variable selling expenses are $50 per pair of skis sold. remaining selling expenses are fixed. The administrative expenses are 17.5% variable and 82.5% fixed. The company does not manufacture its own skis; it purchases them from a supplier for $450 per pair. Required: 1. Prepare a contribution margin income statement for the quarter. 2. For every pair of skis sold during the quarter, what was the contribution toward covering fixed expenses and toward earning profits?
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