Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer the Question #2 in details . Thank you The Alpine House, Inc. is a large retailer of winter sports equipment. Here is an

Please answer the Question #2 in details. Thank you

image text in transcribed

image text in transcribed

image text in transcribed

The Alpine House, Inc. is a large retailer of winter sports equipment. Here is an income statement for the company's Ski department for a recent quarter: THE ALPINE HOUSE, INC. Income Statement-Ski Department For the Quarter Ended March 31 Sales Less: Cost of goods sold Gross margin Less: Operating expenses: Selling expenses $60, eee Administrative expenses 20,000 Net income $560,000 390,000 170,000 80,000 $ 90,000 On average, skis sell for $800 per pair. Variable selling expenses are $50 per pair of skis sold. The remaining selling expenses are fixed. The administrative expenses are 17.5% variable and 82.5% fixed. The company does not manufacture its own skis; it purchases them from a supplier for $450 per pair. Required: 1. Prepare a contribution margin income statement for the quarter. THE ALPINE HOUSE, INC. Contribution Margin Income Statement-Ski Department For the Quarter Ended March 31 Sales $ 560,000 Less: Variable expenses: Cost of goods sold $ 315,000 35,000 3,500 353,500 206,500 Selling expenses Administrative expenses Contribution margin Less: Fixed expenses: Selling expenses Administrative expenses Cost of goods sold 25,000 16,500 75,000 116,500 90,000 Net income $ 2. For every pair of skis sold during the quarter, what was the contribution toward covering fixed expenses and toward earning profits? Contribution margin per pair Answer this

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Managerial Accounting Concepts

Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Old

7th edition

978-0077632427, 77632427, 78025656, 978-0078025655

More Books

Students also viewed these Accounting questions

Question

What are the application procedures?

Answered: 1 week ago