The Alpine House, Inc., is a large retailer of winter sports equipment. An income statement for the

Question:

The Alpine House, Inc., is a large retailer of winter sports equipment. An income statement for the company’s Ski Department for a recent quarter is presented below:

The Alpine House, Inc. Income Statement-Ski Department For the Quarter Ended March 31 $150,000 Sales Cost of goods sold

Skis sell, on the average, for $750 per pair. Variable selling expenses are $50 per pair of skis sold. The remaining selling expenses are fixed. The administrative expenses are 20% variable and 80% fixed. The company does not manufacture its own skis; it purchases them from a supplier for $450 per pair.


Required:

1. Prepare a contribution format 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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Managerial Accounting

ISBN: 9780072834949

11th Edition

Authors: Ray Garrison, Eric Noreen, Peter Brewer

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