Haaki Shop inc is a large retailer of water sports equipment .An income statement for the company's
Question:
Haaki Shop inc is a large retailer of water sports equipment .An income statement for the company's surfboard department for a recent quarter is presented below:
The HAAKI Shop Inc.
Income Statement -Surfboard Department
For the Quarter Ended May 31
Sales$800,000
Less cost of goods sold300,000
Gross margin500,000
Less operating expenses:
Selling expenses$250,000
Administrative expenses160,000
Net operating Income$90,000
The surfboard sell on the average for $400 each.The department's variable selling expenses are $50per surfboard sold.The remaining selling expenses are fixed.The administrative expenses are25% variable and 75% fixed.The company purchases its surfboards from a supplier at a cost of $150 per surfboard.
Required :
1.Prepare and income statement for the quarter using the contribution approach
2.what was the contribution toward fixed expenses and profits from each surfboard sold during the quarter?