The Alpine House is a large manufacturer and retailer of snow skis. The company sold all the products it produced during the period. The company provided the information below.

Total sales revenue $500,000

Selling price per pair of skis $500

Variable selling expense per pair of skis $50

Variable admin expense per pair of skis $10

Total Fixed selling expenses $20,000

Total fixed administrative expenses $20,000

Cost of Goods Sold:

Direct Materials $40,000

Direct Labor $100,000

Manufacturing Overhead $70,000

Included in Manufacturing Overhead is the following:

Rent (Contract at $1,000 per month) $12,000

Salary to Factory Supervisor $50,000

Indirect Materials (Driven on units produced) $8,000

Required;

1. Prepare a traditional format income statement.
2. Prepare a contribution format income statement for the year.
3. Calculate the contribution margin and variable expense ratios.
4. Compute the operating leverage.