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Please answer the following question correctly. Please solve all the parts The Rhythm Shop is a large retailer of acoustic, electric, and bass guitars. An
Please answer the following question correctly. Please solve all the parts
The Rhythm Shop is a large retailer of acoustic, electric, and bass guitars. An income statement for the company's acoustic guitar department for a recent quarter is presented below: THE RHYTHM SHOP Income Statement-Acoustic Guitar Department For the Quarter Ended March 31 Cost of goods sold Sales Gross margin Selling and administrative expenses Selling expenses Administrative expenses Operating income The guitars sell, on average, for $850 each. The department's variable selling expenses are $79 per guitar sold. The remaining selling expenses are fixed. The administrative expenses are 20% variable and 80% foced. The company purchases its guitars from several suppliers at an average cost of $350 per guitar Required: 1. Prepare an income statement for the quarter using the contribution approach THE RYTHIM SHOP Income Statement Act Our Department For the Quarter Ended March 1 2. What was the contribution toward forced expenses and profits from each guitar sold during the quarter? (State this figure in a single dollar amount per guitar.) 3. If The Rhythm Shop sells 140 more guitars in the quarter ending June 30 than it did in the quarter ending March 31, and fixed costs remain the same, by how much will operating income increase Step by Step Solution
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