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The Fun Store. Inc., purchases very large and heavy toys from a manufacturer and sells them at the retail level. The toys cost, on the
The Fun Store. Inc., purchases very large and heavy toys from a manufacturer and sells them at the retail level. The toys cost, on the average, $10 each from the manufacturer. The Fun Store, Inc., sells the toys to its customers at an average price of $41 each. Because of their size and weight, the toys must be delivered to customers. The selling and administrative costs that the company incurs in a typical month are presented below: During October, The Fun Store, Inc., sold and delivered 500 toys. Prepare an income statement for The Fun Store, Inc., for October. Use the traditional format, with costs organized by function. The solution is in the blue packet. Redo (1) above, this time using the contribution format, with costs organized by behavior. Show costs and revenues on both total and a per unit basis down through contribution margin. The solution is in the blue packet. Refer to the income statement you prepared in (2) above. Why might it be misleading to show the fixed costs on a per unit basis? Use your own words. Don't copy this from the solution. You can answer in one sentence
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