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 $4,000 each. Variable selling expenses are $320 per ATV. The remaining selling expenses are fixed. Administrative expenses are 20% variable and 80% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,810 each.

POLARIX Income StatementConsumer ATV Department For Year Ended December 31
Sales				$	656,000
Cost of goods sold					296,840
Gross margin					359,160
Operating expenses
Selling expenses	$	175,000
Administrative expenses		42,500			217,500
Net income				$	141,660

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