Please fill out double check please please thank you much appreciated!!!! Polari

Question

Please fill out double check please please thank you much appreciated!!!!

Polarix is a retailer of ATVs (all-terrain vehicles) and accessories. An income statement for its Consumer ATV Department for the current year follows. ATVs sell for $4,000 each. Variable selling expenses are $270 per ATV. The remaining selling expenses are fixed. Administrative expenses are 70% variable and 30% fixed. The company does not manufacture its own ATVs; it purchases them from a supplierfor $1,890 each. Required: 1. Prepare an income statement for this current year using the contribution margin format.

Explanation / Answer

CONTRIBUTION MARGIN PER TV

= $281280 / 169

= $1664.38

PARTICULLARS AMOUNT $ AMOUNT $ SALES 676000 LESS VARIABLE COST PURCHASE COST (169 * $1890) 319410 VARIABLE SELLING EXPENSES (169 * $270) 45630 VARIABLE ADMIN EXPENSES ($42400 * 70%) 29680 (394720) CONTRIBUTION MARGIN 281280 FIXED COST SELLING EXPENSES (155000 - 45630) 109370 ADMIN EXPENSES (42400 * 30%) 12720 (122090) NET INCOME (LOSS) 159190

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