The New Recreational Company sells two-year memberships to its recreational facilities. For $2,200 in advance, each member receives the right to 30 nights at the company’s campgrounds, 20 rounds on its golf courses, and 50 hours on its bowling lanes. In 2007 the company sold 400 memberships. Members used the campgrounds for 4,100 nights, played 3,000 rounds of golf, and bowled for 10,000 hours. The relevant cost information for the 400 contracts is as follows:

Initial direct costs ............................$ 40,000

Annual indirect costs ...........................100,000

Estimated (and actual) total direct costs for two-year period .............340,000

Direct cost per

Night at campground .............................10

Round of golf...................................15

Hour of bowling ...............................5

Required

Prepare the income statement for 2007.