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The Alpine House, Inc. is a large retailer of winter sports equipment. Here is an income statement for the company's Ski department for a recent
The Alpine House, Inc. is a large retailer of winter sports equipment. Here is an income statement for the company's Ski department for a recent quarter: THE ALPINE HOUSE, INC. Income Statement-Ski Department For the Quarter Ended March 31 Sales Less: Cost of goods sold Gross margin expenses: Less: Operating Administrative Selling expenses expenses Net income $60,000 20,000 $560,000 390,000 170,000 80,000 $ 90,000 On average, skis sell for $800 per pair. Variable selling expenses are $50 per pair of skis sold. The remaining selling expenses are fixed. The administrative expenses are 17.5% variable and 82.5% fixed. The company does not manufacture its own skis; it purchases them from a supplier for $450 per pair. Required: 1. Prepare a contribution margin income statement for the quarter. THE ALPINE HOUSE, INC. Contribution Margin Income Statement-Ski Department For the Quarter Ended March 31 Less: Variable expenses: Less: Fixed expenses: 0 0 2. For every pair of skis sold during the quarter, what was the contribution toward covering fixed expenses and toward earning profits? Contribution margin per pair
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