E6-35A Prepare a contribution margin income statement (Learning Objective 6) Two Lizards is a specialty pet gift store selling exotic pet-related items through its website. Two Lizards has no physical store, all sales are through its website. Results for last year are shown next: 1 Two Lizards Traditional Income Statement Absorption Costing) 3 For the Year Ended December 31 4 5 Sales revenue $ 1,014 000 6 Less Cost of goods sold 665 000 7 Gross profit $ 349,000 6 Less operating expenses 9 Selling and marketing expenses 61.000 TO Website maintenance expenses 59.500 11 Other operating expenses 18.400 138.900 12 Operating income S 210.100 13 For internal planning and decision-making purposes, the owner of Two Lizards would like to translate the company's income statement into the contribution margin format. Since Two Lizards is web-based, all of its cost of goods sold is variable. A large portion of the selling and marketing expenses consists of freight-out charges ($20,400), which were also variable. Only 20% of the remaining selling and marketing expenses and 25% of the web- site expenses were variable. Of the other operating expenses, 90% were fixed. Based on this information, prepare Two Lizards' contribution margin income state- ment for last year. E6-35A Prepare a contribution margin income statement (Learning Objective 6) Two Lizards is a specialty pet gift store selling exotic pet-related items through its website. Two Lizards has no physical store; all sales are through its website. Results for last year are shown next: 1 Two Lizards 2 Traditional Income Statement Absorption Costing) 3 For the Year Ended December 31 4 5 Sales revenue $ 1,014 000 6 Less Cost of goods sold 665 000 7 Gross profit $ 349,000 6 Less operating expenses 9 Selling and marketing expenses 61.000 TO Website maintenance expenses 59.500 IT Other operating expenses 18.400 138.900 12 Operating income s 210.100 13 For internal planning and decision-making purposes, the owner of Two Lizards would like to translate the company's income statement into the contribution margin format. Since Two Lizards is web-based, all of its cost of goods sold is variable. A large portion of the selling and marketing expenses consists of freight-out charges ($20,400), which were also variable. Only 20% of the remaining selling and marketing expenses and 25% of the web- site expenses were variable. Of the other operating expenses, 90% were fixed. Based on this information, prepare Two Lizards' contribution margin income state- ment for last year