Fresh Baked Cookie Company sells cookies in a large shopping mall. The following multiple step income statement was prepared for the year ending December 31, 2004.

Cost of goods sold is a variable cost. Selling expense is 20 percent variable and 80 percent fixed, and administrative expense is 5 percent variable and 95 percent fixed.
Required: Prepare a contribution income statement for the Fresh Baked Cookie Company.

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Sales Cost of Goods Sold Fresh Baked Cookie Company Income Statement For the Year Ended December 31, 2004 Gross Profit Operating Expense: Selling Expense Administrative Expense Operating Income $36,000 4,000 $32,000 $18,000 10,000 (28,000) $4,000