3 hwk, part 4 i Saved Help Save & Exit Exercise 3-4 Contribution Format Income Statement (L03) The Rhythm Shop is a large retailer of acoustic, electric, and bass guitars. An income statement for the company's acoustic guitar department for a recent quarter is presented below: THE RHYTHM SHOP Income Statement-Acoustic Guitar Department For the Quarter Ended March 31 Sales Cost of goods sold OK $2,890,000 1,700,000 1,190,000 Gross margin Selling and administrative expenses: Selling expenses Administrative expenses $ 540,000 340,000 880,000 Operating income $ 310,000 The guitars sell, on average, for $850 each. The department's variable selling expenses are $89 per guitar sold. The remaining selling expenses are fixed. The administrative expenses are 25% variable and 75% fixed. The company purchases its guitars from several suppliers at an average cost of $500 per guitar Required: 1. Prepare an income statement for the quarter using the contribution approach The guitars sell, on average, for $850 each. The department's variable selling expenses are $89 per guitar sold. The remaining selling expenses are fixed. The administrative expenses are 25% variable and 75% fixed. The company purchases its guitars from several suppliers at an average cost of $500 per guitar. Required: 1. Prepare an income statement for the quarter using the contribution approach. -Book Ask THE RHYTHM SHOP Income Statement-Acoustic Guitar Department For the Quarter Ended March 31 Pont Variable expenses Fixed expenses ud fived expenses and profits from each quitar sold during the quarter? (State this fiaure in a single pok SK int 2. What was the contribution toward fixed expenses and profits from each guitar sold during the quarter? (State this figure in a single dollar amount per guitar.) Contribution margin per guitar 3. If The Rhythm Shop sells 130 more guitars in the quarter ending June 30 than it did in the quarter ending March 31, and fixed costs remain the same, by how much will operating income increase? Operating income increase by