THE ALPINE HOUSE, INC.

Contribution Margin Income StatementSki Department

For the Quarter Ended March 31

| | | |

|----------------|---------|---------|

| Sales | $560,000| |

| Less: Variable Costs | Cost of goods sold | $390,000 |

| | Variable Selling Expenses | $30,000 |

| | Administrative Expenses (17.5% of Sales) | $98,000 |

| Total Variable Costs | | $518,000 |

| Contribution Margin | | $42,000 |

| Less: Fixed Costs | Selling Expenses (Fixed) | $60,000 |

| | Administrative Expenses (82.5% of Sales) | $144,500 |

| Total Fixed Costs | | $204,500 |

| Net Income | | $(-)162,500 |

2. Compute the following:

a. The dollar contribution and contribution margin ratio per pair of skis sold.

- Contribution per Pair of Skis Sold:

Contribution per Pair of Skis Sold = (Selling Price per Pair of Skis Sold - Variable Costs per Pair of Skis Sold)

Contribution per Pair of Skis Sold = ($800 - $450 - $50)

Contribution per Pair of Skis Sold = $300

- Contribution Margin Ratio per Pair of Skis Sold:

Contribution Margin Ratio per Pair of Skis Sold = (Contribution per Pair of Skis Sold/Selling Price per Pair of Skis Sold) x 100

Contribution Margin Ratio per Pair of Skis Sold = ($300/$800) x 100

Contribution Margin Ratio per Pair of Skis Sold = 37.5%

b. The breakeven point in pairs of skis.

- Breakeven Point in Pairs of Skis:

Breakeven Point in Pairs of Skis =

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