Exercise 06-8 Contribution margin format income statement LO P2 Polarix is a retailer of ATVs (all-terrain vehicles) and accessories. An income statement for its Consumer ATV Department for the current year follows. ATVs sell for $3,800 each. Variable selling expenses are $290 per ATV. The remaining selling expenses are fixed. Administrative expenses are 10% variable and 90% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,920 each. POLARIX Income Statement-consumer ATV Department For Year Ended December 31 Sales $ 665,000 Cost of goods sold 336,000 Gross margin 329,000 Operating expenses Selling expenses $170,000 Administrative expenses 41,800 211,800 Net income $ 117,200 Required: 1. Prepare an income statement for the current year using the contribution margin format. (Do not round intermediate calculations. Round contribution margin per ATV value to the nearest whole number.) POLARIX Income Statement - Consumer ATV Department For Year Ended December 31 Sales Less: Cost of goods sold Variable cost of goods sold 336,000 Variable administrative expenses EA 665,000 336,000 Total variable expenses Contribution margin Less: Cost of goods sold Fixed selling expenses Fixed administrative expenses 0 Net income (loss) 2. For each ATV sold during this year, what is the contribution toward covering fixed expenses and earning income? Contribution margin per ATV