Mountain SporB Ltd. Income Statement For the'fear Ended Dec 31, 2019 :1 Part A: Cost Classification {Chapter 2, 6} {5 marks] Required: Classify each of the below operating expensa as variable or fixed. Cost Cost of goods sold increases proportionately with sales Employees are paid fixed monthly salaries supplemented by a commission on all sales except fcr Variable or Fixed Monthly Salaries To be calculated by the group Sales 1,910,959 Cost of goods sold ??4,502 Gross margin 1,135,353\" Operating expenses: (See notes] Advertising 105,000 Depreciation 23,55? Property taxes 39,515 Rent 105,330 Pars 8: service expenses 95,049 Salaries and commissions 415,525 Utilities 100,029 Total operating expenses 555,555 Operating income 24?,521 Interest expenses Income before taxes 239,521 Income taxes 59,955 Net income 129,555 Commission as a percentage ofsales 12% Rent components: Monthly 4,000 Percentage of sales 3% Utilities costs incurred are independent ofsales volume [they will not change if sales volume Pars and Service expense varies with sales activity and can be traced to each product line. The company uses straight-line depreciation on all depreciable assets. The property taxes are set by the City and do not change with changes in sales volume. Advertising budgets are committed to at the beginning of each year. Note 1: Sala by Segment (taken from [12 segmented income statement) Cross CountrySki Packages Mountain Bikes Accessoria Parts E Service Sal 5 552,123 5 T-"45,315 5 355,555 5 113,595 Part B: [NF Income Statement {Chapter 5} {13 marks] Prepare a contribution margin income statement {below}, using the traditional income state I - 1- Note [mm Instructor: provided and the cost information provided in Part A Check. figura have been - -- ' - "i to ensure Fill formulas must be completed within the answer bot-res. Do not use a calculator and input the final answer. It will result in Mountain EDD\": Lt" rounding errors and you will be marked as Contribution IvIargin Income Statement incorrect. This is applicable Icr all For the Year Ended DEE 31 2019 calculations in the case study. Note from Instructor: You will be marked as incorrect if you do not follow instructions! Please read carefully! Total variable costs Contribution Margin i 1,910,909 0,000 1,902,909 Operating Income Less: Interest Expense Earnings Before Income Taxes Less: Income Taxes Net Income