Handwritten will be better to understand.

PROBLEM 5: 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 $ 8,00,000 Less: Cost of goods sold $ 3,00,000 Gross profit $ 5,00,000 Less: Selling expense $ 2,50,000 Administrative expense $1,60,000 Net Operating Income $ 90,000 The surfboards sell, on the average, for $400 each. The department's variable selling expenses are $50 per surfboard sold. The remaining selling expenses are fixed. The administrative expenses are 25% variable and 75% fixed. The company purchases its surfboards from a supplier at a cost of $150 per surfboard. Required: Prepare an income statement for the quarter using the contribution approach