The alpine house, inc., is a large retailer of snow skis. the company assembled the information shown below for the quarter ended march 31: amountsales $ 1,092,000selling price per pair of skis $ 420variable selling expense per pair of skis $ 49variable administrative expense per pair of skis $ 16total fixed selling expense $ 135,000total fixed administrative expense $ 130,000beginning merchandise inventory $ 70,000ending merchandise inventory $ 115,000merchandise purchases $ 295,000 required: 1. prepare a traditional income statement for the quarter ended march 31.2. prepare a contribution format income statement for the quarter ended march 31.3. what was the contribution margin per unit?

Instructions are listed below

Explanation:

Giving the following information:

The company assembled the information shown below for the quarter ended March 31:

Amount Sales= $ 1,092,000

Selling price per pair of skis $ 420

Variable selling expense per pair of skis $ 49

Variable administrative expense per pair of skis $ 16

Total fixed selling expense $ 135,000

Total fixed administrative expense $ 130,000

Beginning merchandise inventory $ 70,000

Ending merchandise inventory $ 115,000

Merchandise purchases $ 295,000

First, we need to calculate the cost of goods sold (COGS):

COGS= beginning merchandise inventory + purchases - ending merchandise inventory

COGS= 70000 + 295000 - 115000= $250,000

A) The general structure of an income statement proceeds as follow:

Revenue/Sales (+)

Cost of Goods Sold (COGS) (-)

=Gross Profit

Marketing, Advertising, and Promotion Expenses (-)

General and Administrative (G&A) Expenses (-)

=EBITDA

Depreciation & Amortization Expense (-)

=Operating Income or EBIT

Interest (-)

Other Expenses (-)

=EBT (Pre-Tax Income)

Income Taxes (-)

=Net Income

In this exercise:

Sales= 1092000

COGS= 250,000

Gross income= $842,000

Total selling expense= 49*420+ 135,000= 155,580

Total administrative expense= 16*420 + 130,000= 136,720

EBITDA= $549,700

B) A Contribution Margin Income Statement is a special format of the income statement that segregates the variable and fixed expenses involved in running a business.

Sales= 1,092,000

Variable costs:

Cost of good sold= 250,000

Sales commissions=49*420= $20,580

Shipping expense= 16*420= $6,720

Total variable cost= $277,300

Contribution margin= $814,700

Fixed costs:

Fixed Administrative expense= $ 130,000

IFixed selling expense= $135,000

Total fixed cost= $265,000

Net profit= $549,700

C) contribution margin per unit= $814,700/420= $1939.76

d, conspicuous consumption is when you try to increase your wealth or social status (and in the case he's trying to create the perception of wealth considering he can't really afford it)

answer; /// i believe that the correct answer is (b) money set aside for emergency repairs;