Question
Ava's Boutique is a small e-tail business specializing in the hand crocheted hats for adults over the internet. The business is owned by a sole
Ava's Boutique is a small e-tail business specializing in the hand crocheted hats for adults over the internet. The business is owned by a sole proprietor and operated out of her home. Results for last year are as follows: AVA'S BOUTIQUE Income Statement For the Year Ended December 31 Sales revenue $ 289,300 Cost of goods sold 201,100 Gross profit 88,200 Operating expenses: Selling & marketing expenses $18,900 Website maintenance expenses 17,400 Other operating expenses 5,900 Total operating expenses (42,200) Operating income $ 46,000 Since Ava's Boutique is an e-tailer, all of its cost of goods sold was variable. A large portion of the selling and marketing expenses consisted of freight-out charges ($2902), which were also variable. Only 10% of the remaining selling and marketing expenses and 25% of the website expenses were variable. Of the other operating expenses, 60% were fixed. Required: Based on this information, prepare Ava's Boutique's contribution margin income statement for last year
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