5. Precious Pets is a small e-tail business specialized in the sale of exotic pet gifts and accessories over the Web. The business is owned by a sole proprietor and operated out of her home. Results of last year are shown below: Precious Pets Income Statement For the Year Ended December 31 Sales Revenue (7,000 units sold) $987,000 Cost of Goods Sold ($95 per unit) (665,000) Gross Profit 322,000 Operating Expenses: Marketing expenses (6% of sales) (59,220) Web site maintenance expenses ($16,520 + 4% of sales) (56,000) Other administrative salaries expenses (10,000) Packaging expenses ($1 per unit) (7,000) Operating Income $189,780 Required: A) Prepare the income statement using the contribution margin format. ($216,300)