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25) 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

25)

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 $3,200 each. Variable selling expenses are $240 per ATV. The remaining selling expenses are fixed. Administrative expenses are 40% variable and 60% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,860 each.

POLARIX Income StatementConsumer ATV Department For Year Ended December 31, 2015
Sales $ 624,000
Cost of goods sold 362,700
Gross margin 261,300
Operating expenses
Selling expenses $ 135,000
Administrative expenses 42,800 177,800
Net income $ 83,500

Required:
1.

Prepare an income statement for this current year using the contribution margin format.

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