a. 39. Contribution Margin Income Statement, Service Company Traditional income statement: Sales Cost of goods sold Gross margin Selling and administrative costs Operating profit $200,000 90,000 b. Contribution margin income statement: Sales Variable costs: Cost of goods sold Selling and administration Total variable costs Contribution margin Fixed costs: Cost of goods sold Selling and administration Total fixed costs Operating profit 39. Contribution Margin Income Statement, Service Company. Last month Supreme Sushi had total sales of $200,000. Food preparation and service costs totaled $90,000 (20 percent fixed, 80 percent variable). Selling and administrative costs totaled $30,000 (70 percent fixed, 30 percent variable). Required: a. Prepare a traditional income statement for Supreme Sushi. b. Prepare a contribution margin income statement for Supreme Sushi. c. Why do companies use the contribution margin income statement format