Crazy Canucks is a small, familyowned retailer specializing in alpine ski and snowboard equipment located in Squamish, BC An income statement for the ski departments most recent month is shown below.

CRAZY CANUCKS

Income StatementCrazy Canucks

For the Month Ended January

Sales $

Cost of goods sold

Gross margin

Selling and administrative expenses:

Selling expenses $

Administrative expenses

Operating income $

Skis sell, on average, for $ per pair. Variable selling expenses are $ per pair of skis sold. The remaining selling expenses are fixed. The administrative expenses are variable and fixed. The company purchases its skis from several suppliers at an average cost of $ per pair.

Required:

Prepare an income statement for the month using the contribution approach.

For every pair of skis sold during January, what was the contribution toward covering fixed expenses and toward earning profits?

What would the total contribution margin be in a month where pairs of skis were sold?