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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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