Polarix is a retailer of ATVs (all-terrain vehicles) and accessories. An income statement for its Consumer ATV Department for the current year follows. ATVs sell for $3,600 each. Variable selling expenses are $220 per ATV. The remaining selling expenses are fixed. Administrative expenses are 30% variable and 70% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,920 each.

POLARIX

Income StatementConsumer ATV Department

For Year Ended December 31

Sales$651,600

Cost of goods sold347,520

Gross margin304,080

Operating expenses

Selling expenses$150,000

Administrative expenses41,000191,000

Net income$113,080

1- Make an income statement for the current year using the contribution margin format.

Chart Using: Sales, less: variable expenses, variable cost of goods sold, variable selling expenses, variable administrative expenses, total selling expenses, total variable expenses, contribution margin, less: fixed expenses, fixed selling expenses, fixed administrative expenses, total administrative expenses, net income loss and contribution margin per ATV