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 StatementCrazy Canucks

For the Month Ended January 31Sales$348,000Cost of goods sold208,800Gross margin139,200Selling and administrative expenses:Selling expenses$69,600Administrative expenses23,20092,800Operating income$46,400

Skis sell, on average, for $1,500 per pair. Variable selling expenses are $182 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.