#4Pest Control, Inc. manufactures and sells mousetraps.Following is their Income Statement (Traditional Format) for the end of the last period:

Pest Control, Inc.

Income Statement

For the Year Ended Dec. 31

Sales$ 200,000

Less Cost of Goods Sold120,000

Gross Margin80,000

Less Operating Expenses:

Selling Expenses20,000

Administrative Expenses40,000

Net Operating Income$20,000

Mousetraps sell for $5.00 each.The Cost of Goods Sold is considered a variable cost associated with direct material and direct labor.

Selling Expenses shown above are 50% variable and 50% fixed.

Administrative expenses are $ .50 per trap and the remainder of administrative expenses are fixed.

a.Prepare an Income Statement for the end of the same period using the contribution approach (similar to what is shown in Exhibit 1-7 on page 39 of the textbook).

b.What was the contribution margin per trap for the period?