Smooth Surface Inc. (SSI) is a retail outlet for customized speedboats. The average cost of a boat to the company is $\$ 12,500$. SSI includes a markup of 30 percent of cost in the sales price. In 2000 , SSI sold 33 boats and finished the year with the same amount of inventory it had at the beginning of the year. Additional operating costs for the year were as follows:

1. Prepare a traditional income statement using the functional approach.
2. Prepare an income statement using the contribution margin format.
3. Interpretive Question: Which statement is more useful for decision making? Why?

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Selling expenses: Advertising (fixed) Commissions (mixed) Depreciation (fixed). Utilities (fixed) Freight on delivery (variable) Administrative expenses: Salaries (fixed) Depreciation (fixed).. Utilities (fixed) Clerical (variable) $ 500 per month 4,500 per month plus 2% of sales 300 per month 150 per month 100 per boat $4,000 per month 300 per month 150 per month 25 per sale