I don't know how to answer these questions. Please help. Thank you. AIO is a large retailer of equipment for pickup trucks. An income statement for the company's bed liner department for the most recent quarter is presented below:

AIO Income statement for the year ended 31 December 2021 Sales $ 700,000 Cost of goods sold $ 250,000 Gross margin $ 450,000

Selling and administrative expenses: Selling expenses $ (195,000) Administrative expenses. $ (145,000) Net operating income $ 110,000

The liners sell, on average, for $350 each. The department's variable selling expenses are $35 per liner sold. The remaining selling expenses are fixed. The administrative expenses are 25% variable and 75% fixed. The company purchases its liners from a supplier at a cost of $125 per liner.

Question: Prepare an income statement for AIO, using the contribution approach with all your workings.