Question
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
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 $3,200 each. Variable selling expenses are $210 per ATV. The remaining selling expenses are fixed. Administrative expenses are 60% variable and 40% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,820 each.
POLARIX Income StatementConsumer ATV Department For Year Ended December 31 | ||||||
Sales | $ | 633,600 | ||||
Cost of goods sold | 360,360 | |||||
Gross margin | 273,240 | |||||
Operating expenses | ||||||
Selling expenses | $ | 180,000 | ||||
Administrative expenses | 42,300 | 222,300 | ||||
Net income | $ | 50,940 | ||||
Required: 1. Prepare an income statement for the current year using the contribution margin format. (Do not round intermediate calculations. Round contribution margin per ATV value to the nearest whole number.)
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