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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 $3,800 each. Variable selling expenses are $320 per ATV. The remaining selling expenses are fixed. Administrative expenses are 70% variable and 30% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,870 each.
POLARIX Income StatementConsumer ATV Department For Year Ended December 31 | ||||||
Sales | $ | 676,400 | ||||
Cost of goods sold | 332,860 | |||||
Gross margin | 343,540 | |||||
Operating expenses | ||||||
Selling expenses | $ | 165,000 | ||||
Administrative expenses | 40,700 | 205,700 | ||||
Net income | $ | 137,840 | ||||
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