Two Lizards is a specialty pet gift store selling exotic pet- related items through its website. Two Lizards has no physical store; all sales are through its website. Results for last year are shown next:

For internal planning and decision- making purposes, the owner of Two Lizards would like to translate the company’s income statement into the contribution margin format. Since Two Lizards is web- based, all of its cost of goods sold is variable. A large portion of the selling and marketing expenses consists of freight- out charges ($ 20,400), which were also variable. Only 20% of the remaining selling and marketing expenses and 25% of the web-site expenses were variable. Of the other operating expenses, 90% were fixed.
Based on this information, prepare Two Lizards’ contribution margin income statement for lastyear.

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Two Leards Traditional Income Statement (Absorption Costing) For the Year Ended December 31 4. 5 Sales revenue 6 Less: Cost of goods sold 1014000 665,000 349,000 Gross profit 8 Less operating expenses 9 Selling and marketing expenses 10 Website maintenance expenses 11Other operating expenses 12 Operating income 13 S 61,000 59,500 18400138900 S 2101 00