Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Crazy Canucks is a small, family-owned retailer specializing in alpine ski and snowboard equipment located in Squamish, B.C. An income statement for the ski
Crazy Canucks is a small, family-owned retailer specializing in alpine ski and snowboard equipment located in Squamish, B.C. An income statement for the ski department's most recent month is shown below. CRAZY CANUCKS Income Statement-Crazy Canucks For the Month Ended January 31 Sales $ 354,000 Cost of goods sold Gross margin 212,400 141,600 Selling and administrative expenses: Selling expenses Administrative expenses $70,800 23,600 Operating income 94,400 $ 47,200 Skis sell, on average, for $1,500 per pair. Variable selling expenses are $186 per pair of skis sold. The remaining selling expenses are fixed. The administrative expenses are 20% variable and 80% fixed. The company purchases its skis from several suppliers at an average cost of $900 per pair. Required: 1. Prepare an income statement for the month using the contribution approach. Crazy Canucks Income Statement-Crazy Canucks For the Month Ended January 31 Sales Variable expenses: Cost of goods sold Selling expenses Administrative expenses Contribution margin Fixed expenses: Selling expenses Administrative expenses Operating income EA $ 0 $ 0 0 0 2. For every pair of skis sold during January, what was the contribution toward covering fixed expenses and toward earning profits? Contribution margin per pair 3. What would the total contribution margin be in a month where 186 pairs of skis were sold? Total contribution margin
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started