Haaki Shop, Inc., is a large retailer of water sports equipment. An income statement for the company€™s surfboard department for a recent quarter is presented below:

The surfboards sell, on the average, for $400 each. The department€™s variable selling expenses are $50 per surfboard sold. The remaining selling expenses are fixed. The administrative expenses are 25% variable and 75% fixed. The company purchases its surfboards from a supplier at a cost of $150 per surfboard.

Required:
1. Prepare an income statement for the quarter using the contribution approach.
2. What was the contribution toward fixed expenses and profits from each surfboard sold during the quarter?

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The Haaki Shop, Inc. Income Statement Surfboard Department For the Quarter Ended May 31 $800,000 300,000 Sales Cost of goods sold Gross margin Selling and administrative expenses: 500,000 Selling expenses.... Administrative expenses... $250,000 . 160,000 410,000 $ 90,000 Net operating income.