Exercise 19-8 Contribution margin format income statement LO P2

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 $3,800 each. Variable selling expenses are $250 per ATV. The remaining selling expenses are fixed. Administrative expenses are 50% variable and 50% 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				$	646,000
Cost of goods sold					321,300
Gross margin					324,700
Operating expenses
Selling expenses	$	135,000
Administrative expenses		41,300			176,300
Net income				$	148,400

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
		0
		0
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: