Fabulous Flamingos is a specialty pet gift shop selling exotic pet- related items over the Internet. Results for last year are as follows:

For internal planning and decision- making purposes, the owner of Fabulous Flamingos would like to translate the company’s income statement into the contribution margin format. Since Fabulous Flamingos is a web retailer and has no physical presence, all of its cost of goods sold is variable. A large portion of the selling and marketing expenses consists of freight- out charges $ 19,400, which were also variable. Only 20% of the remaining selling and marketing expenses and 25% of the website expenses were variable. Of the other operating expenses, 90% were fixed. Based on this information, prepare Fabulous Flamingos’ contribution margin income statement for lastyear.

  • CreatedAugust 27, 2014
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