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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 $3,400 each. Variable selling expenses are $240 per ATV. The remaining selling expenses are fixed. Administrative expenses are 10% variable and 90% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,830 each.

POLARIX Income StatementConsumer ATV Department For Year Ended December 31, 2017
Sales $ 618,800
Cost of goods sold 333,060
Gross margin 285,740
Operating expenses
Selling expenses $ 180,000
Administrative expenses 41,500 221,500
Net income $ 64,240

Required:

1. Prepare an income statement for this current year using the contribution margin format. (Round contribution margin per ATV to the nearest dollar amount.)

POLARIX
Income Statement - Consumer ATV Department
For Year Ended December 31, 2017
0
0
Net income (loss)
2. For each ATV sold during this year, what is the contribution toward covering fixed expenses and earning income?
Contribution margin per ATV:

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