Prepare traditional and contribution margin income statements (Learning Objectiv

Question

Prepare traditional and contribution margin income statements (Learning Objective 6) The Willowick Ice Cream Shoppe sold 8,700 servings of ice cream during June for 3perserving. TheshoppurchasestheicecreaminlargetubsfromtheDeluxelceCreamCompany. Eachtubcoststheshop12 and has enough ice cream to fill 30 ice cream cones. The shop purchases the ice cream cones for 0.25eachfromalocalwarehouseclub. Locatedinanoutdoormall, therentfortheshopspaceis1,600 per month. The shop expenses P6-64A 200amonthforthedepreciationoftheshop'sfurnitureandequipment. DuringJune, theshopincurredanadditiona2,600 of other operating expenses (75% of these were fixed costs). Requirements 1. Prepare The Willowick Ice Cream Shoppe's June income statement using a traditional format. 2. Prepare The Willowick Ice Cream Shoppe's June income statement using a contribution margin format.

Explanation / Answer

1. Income Statement

The Willowick Icecream shoppe

Income statement

for the month ended June 30

*$12 per tub/ 30 servings= $0.4 for ice cream+$0.25 for ice cream cone that totals $0.65

2. Contribution Margin Income Statement

The Willowick Ice cream Shoppe

Contribution margin Income Statement

For the month ended June 30

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