The Fantastic Ice Cream Shoppe sold 8,800 servings of ice cream during June for $ 5 per serving. The shop purchases the ice cream in large tubs from the Deluxe Ice Cream Company. Each tub costs the shop $ 14 and has enough ice cream to fill 28 ice cream cones. The shop purchases the ice cream cones for $ 0.15 each from a local ware-house club. The Fantastic Ice Cream Shoppe is located in a strip mall, and rent for the space is $ 2,050 per month. The shop expenses $ 220 a month for the depreciation of the shop’s furniture and equipment. During June, the shop incurred an additional $ 2,800 of other operating expenses (75% of these were fixed costs).
1. Prepare The Fantastic Ice Cream Shoppe’s June income statement using a traditional format.
2. Prepare The Fantastic Ice Cream Shoppe’s June income statement using a contribution margin format.