7. Special Seals is a specialty pet gift shop selling exotic pet-related items online. The shop has no physical location. Results for last year are shown next: (Click the icon to view the results.) For internal planning and decision-making purposes, the owner of Special Seals would like to translate the company's income statement into the contribution margin format. Since Special Seals is online only, all of its cost of goods sold is variable. A large portion of the selling and marketing expenses consists of freight-out charges ($19,600), which were also variable. Only 20% of the remaining selling and marketing expenses and 25% of the website expenses were variable. Of the other operating expenses, 90% were fixed. Based on this information, prepare Special Seals' contribution margin income statement for last year. Special Seals Contribution Margin Income Statement For the Year Ended December 31 (1) Less: (2) (3) (5) (6) (7) Less: (8) (9) (10) (11) (12) 1: Data Table Special Seals Traditional Income Statement (Absorption Costing) For the Year Ended December 31 Sales revenue $ 1,005,000 668.000 S 337,000 Less: Cost of goods sold Gross profit Less operating expenses: Selling and marketing expenses Website maintenance expenses Other operating expenses $ 65,000 55,500 18.400 138,900 $ 198.100 Operating income (1) O O Contribution margin O Cost of goods sold O Fixed expenses O Fixed selling and marketing expenses O Fixed website maintenance expenses Operating income Other fixed operating expenses Other variable operating expenses O Sales revenue O Total fixed expenses Total variable expenses O Variable expenses O Variable selling and marketing expenses O Variable website maintenance expenses (2) O Fixed and marketing expenses Other variable operating expenses O Contribution margin Fixed website maintenance expenses O Sales revenue O Cost of goods sold O Operating income Total fixed expenses Fixed expenses O Other fixed operating expenses Total variable expenses O Variable expenses O Variable selling and marketing expenses O Variable website maintenance expenses (3) O O Contribution margin O Cost of goods sold O Fixed expenses O Fixed selling and marketing expenses Other variable operating expenses O Fixed website maintenance expenses O Sales revenue Operating income Total fixed expenses O Other fixed operating expenses O Total variable expenses O Variable expenses O Variable selling and marketing expenses O Variable website maintenance expenses (4) O O Contribution margin O Cost of goods sold O Fixed expenses O Fixed selling and marketing expenses O Fixed website maintenance expenses Operating income Other fixed operating expenses O Other variable operating expenses O Sales revenue O Total fixed expenses Total variable expenses O Variable expenses O Variable selling and marketing expenses O Variable website maintenance expenses (5) O O Fixed selling and marketing expenses Contribution margin Fixed website maintenance expenses O Cost of goods sold Operating income O Fixed expenses O Other fixed operating expenses Other variable operating expenses O Sales revenue Total fixed expenses Total variable expenses O Variable expenses O Variable selling and marketing expenses O Variable website maintenance expenses (6) O O Fixed selling and marketing expenses Other variable operating expenses O Contribution margin O Fixed website maintenance expenses O Sales revenue O Cost of goods sold Operating income Total fixed expenses O Fixed expenses Other fixed operating expenses Total variable expenses O Variable expenses O Variable selling and marketing expenses O Variable website maintenance expenses (7) O O Fixed selling and marketing expenses O Contribution margin Fixed website maintenance expenses O Cost of goods sold Operating income Fixed expenses Other fixed operating expenses O Other variable operating expenses O Sales revenue Total fixed expenses Total variable expenses O Variable expenses O Variable selling and marketing expenses O Variable website maintenance expenses (8) O Fixed selling and marketing expenses Other variable operating expenses O Contribution margin Fixed website maintenance expenses O Sales revenue O Cost of goods sold Operating income Total fixed expenses O Fixed expenses O Other fixed operating expenses Total variable expenses O Variable expenses O Variable selling and marketing expenses O Variable website maintenance expenses (9) O O Contribution margin O Cost of goods sold Fixed expenses O Fixed selling and marketing expenses O Fixed website maintenance expenses o Operating income Other fixed operating expenses Other variable operating expenses O Variable expenses O Sales revenue O Variable selling and marketing expenses Total fixed expenses O Variable website maintenance expenses Total variable expenses (10) O Fixed selling and marketing expenses O Contribution margin O Fixed website maintenance expenses Cost of goods sold Operating income O Fixed expenses Other fixed operating expenses 0000 Other variable operating expenses Sales revenue Total fixed expenses Total variable expenses O Variable expenses O Variable selling and marketing expenses O Variable website maintenance expenses (11) O O Contribution margin O Cost of goods sold O Fixed expenses Fixed selling and marketing expenses Other variable operating expenses Fixed website maintenance expenses Sales revenue O Operating income O Total fixed expenses O Other fixed operating expenses O Total variable expenses O Variable expenses O Variable selling and marketing expenses O Variable website maintenance expenses (12) O Contribution margin O Cost of goods sold Fixed expenses O Fixed selling and marketing expenses Fixed website maintenance expenses O Operating income Other fixed operating expenses Other variable operating expenses O Sales revenue O Total fixed expenses O Total variable expenses O Variable expenses O Variable selling and marketing expenses O Variable website maintenance expenses