Polarix is a retailer of ATVS (all-terrain vehicles) and accessories. An Income statement for its Consumer...

 

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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 $4,200 each. Variable selling expenses are $290 per ATV. The remaining selling expenses are fixed. Administrative expenses are 80% variable and 20% fixed. The company does not manufacture its own ATVs: It purchases them from a supplier for $1,910 each. POLARIX Income Statement-Consumer ATV Department For Year Ended December 11 Sales Cost of goods sold Gross margin Operating expenses Selling expenses Administrative expenses Net Income Sales Less: Variable expenses Required: 1. Prepare an income statement for the current year using the contribution margin format. (Do not round Intermediate calculations. Round contribution margin per ATV value to the nearest whole number.) Variable cost of goods sold Variable selling expenses Variable administrative expenses Contribution margin Less: Fixed expenses $175,000 42,700 POLARIX Income Statement - Consumer ATV Department For Year Ended December 31 Fixed selling expenses Fixed administrative expenses Net income (loss) $638,488 290,320 348,000 217,700 $130,388 0 0 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 $4,200 each. Variable selling expenses are $290 per ATV. The remaining selling expenses are fixed. Administrative expenses are 80% variable and 20% fixed. The company does not manufacture its own ATVs: It purchases them from a supplier for $1,910 each. POLARIX Income Statement-Consumer ATV Department For Year Ended December 11 Sales Cost of goods sold Gross margin Operating expenses Selling expenses Administrative expenses Net Income Sales Less: Variable expenses Required: 1. Prepare an income statement for the current year using the contribution margin format. (Do not round Intermediate calculations. Round contribution margin per ATV value to the nearest whole number.) Variable cost of goods sold Variable selling expenses Variable administrative expenses Contribution margin Less: Fixed expenses $175,000 42,700 POLARIX Income Statement - Consumer ATV Department For Year Ended December 31 Fixed selling expenses Fixed administrative expenses Net income (loss) $638,488 290,320 348,000 217,700 $130,388 0 0

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Using the contribution margin format we deduct the variable costs from the sales to ob... View the full answer