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.

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Fabulous Flamingos Traditional Income Statement (Absorption Costing) For the Year Ended December 31 4. S Sales revenue 6 Less: Cost of goods sold 7 Gross profit 8 Less operating experses 9 Selling and marketing expenses 10 11 Otheroperating expenses 12 Operating income 13 $1,005,000 669,000 336,000 S 61,000 Website maintenance expenses S 201,500