1. Prepare an income statement for this current year using the contribution margin format. (Round contribution margin per ATV to the nearest dollar amount.)

Polarix is a retailer of ATVs (all-terrain vehicles) and accessories. An income statement for its Consumer ATV Department for the current year follows. ATVs sell for $3,400 each. Variable selling expenses are $310 per ATV. The remaining selling expenses are fixed. Administrative expenses are 70% variable and 30% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,890 each.

POLARIX Income StatementConsumer ATV Department For Year Ended December 31, 2017
Sales				$	608,600
Cost of goods sold					338,310
Gross margin					270,290
Operating expenses
Selling expenses	$	135,000
Administrative expenses		40,900			175,900
Net income				$	94,390

Required:

1. Prepare an income statement for this current year using the contribution margin format. (Round contribution margin per ATV to the nearest dollar amount.)

POLARIX
Income Statement - Consumer ATV Department
For Year Ended December 31, 2017
Sales		$608,600
Less: Variable expenses
Variable selling expenses	$325,080
Variable administrative expenses	$28,630
Total variable expenses		353,710
Contribution margin
Less: Fixed expenses
Fixed selling expenses	106,370
Fixed administrative expenses	28,630
Total fixed expenses		135,000
Net income (loss)
2. For each ATV sold during this year, what is the contribution toward covering fixed expenses and earning income?
Contribution margin per ATV: