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The Alpine House, Inc. is a large retailer of winter sports equipment. Here is an income statement for the companys Ski department for a recent

The Alpine House, Inc. is a large retailer of winter sports equipment. Here is an income statement for the companys Ski department for a recent quarter:

THE ALPINE HOUSE, INC. Income StatementSki Department For the Quarter Ended March 31
Sales $ 560,000
Less: Cost of goods sold 390,000
Gross margin 170,000
Less: Operating expenses:
Selling expenses $ 60,000
Administrative expenses 20,000 80,000
Net income $ 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.

2. For every pair of skis sold during the quarter, what was the contribution toward covering fixed expenses and toward earning profits?

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