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.

  • CreatedAugust 27, 2014
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