Chapter 5 High/Low Problem Kate's Catfish Specialty Product is in high demand because of it's unusual flavor. Below are income statements for the first three months of the current year presented in the traditional format. Your CEO has asked for the income statement for the first quarter be presented in the Contribution format and has asked you to prepare it. REQUIRED: a. Use the information given below to prepare an income statement in the Contribution format b. Write the total cost formula for Kate's Catfish Specialty Product Notes: 1. The traditional income statement uses Absorption costing for cost of goods sold and for all operating expenses. 2. You should use the format presented in exhibit 6-2 on page 253 of the text as an example to prepare the income statement in the contribution format 3. Any variable operating expenses should be categorized as production or sales expenses. 4. Any fixed expenses should be categorized as production or sales expenses. 5. Hint, total sales dollars for the first quarter equal $2,062,500. 5. Your solution MUST be submitted in either word or excel. March Months Units processed and sold Dollar Sales 150,000 $ January 100,000 550,000 $ 400,000 150,000 February 125,000 687,500 $ 475,000 212,500 Cost of Sales 825,000 550.000 275,000 Gross Margin Operating expenses: Sales salaries Sales commissions Shipping expense Maintenance - production Insurance production Depreciation - production Utilities - production Total Operating expenses Net operating income 75,000 5,000 11,500 27,500 1,000 2,000 16,000 75,000 6,250 14,000 33,750 1,000 2,000 75,000 7,500 16,500 40,000 1,000 2,000 23,500 19,750 138,000 12.000 $ 151.750 60.750 $ 165 500 1109.500 S