Prepare traditional and contribution margin income statements (Learning Objective 6) Kelsey’s Ice Cream Shoppe sold 9,000 servings of ice cream during June for $3 per serving. Kelsey purchases the ice cream in large tubs from the BlueBell Ice Cream Company. Each tub costs Kelsey $15 and has enough ice cream to fill 30 ice cream cones. Kelsey purchases the ice cream cones for $0.05 each from a local warehouse club. Kelsey’s Shoppe is located in a local strip mall, and she pays $1,800 a month to lease the space. Kelsey expenses $250 a month for the depreciation of the Shoppe’s furniture and equipment. During June, Kelsey incurred an additional $2,500 of other operating expenses (75% of these were fixed costs).
1. Prepare Kelsey’s June income statement using a traditional format.
2. Prepare Kelsey’s June income statement using a contribution margin format.