ads

Tuesday, 24 July 2012

Haaki Shop, Inc., is a large retailer of surfboards. The company assembled the information shown

Haaki Shop, Inc., is a large retailer of surfboards. The company assembled the information shown below for the quarter ended May 31:

  Amount
  Total sales revenue $ 800,000   
  Selling price per surfboard $ 400   
  Variable selling expense per surfboard $ 50   
  Variable administrative expense per surfboard $ 20   
  Total fixed selling expense $ 150,000   
  Total fixed administrative expense $ 120,000   
  Merchandise inventory, beginning balance $ 80,000   
  Merchandise inventory, ending balance $ 100,000   
  Merchandise purchases $ 320,000   


Required:
1.
Prepare a traditional income statement for the quarter ended May 31. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

Haaki Shop, Inc.
Traditional Income Statement
  Sales   $  
  Cost of goods sold    
        
  Gross margin          
  Selling and administrative expenses:    
    Selling expenses $  
    Administrative expenses  
 
 
     
   
  Net operating income   $  
   



2.
Prepare a contribution format income statement for the quarter ended May 31. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

Haaki Shop, Inc.
Contribution Format Income Statement
  Sales   $  
  Variable expenses:    
     Cost of goods sold $    
     Selling expenses    
     Administrative expenses    
 

  Contribution margin    
  Fixed expenses:    
     Selling expenses    
     Administrative expenses    
 

  Net operating income   $  
   



3.
What was the contribution toward fixed expenses and profits for each surfboard sold during the quarter? (Omit the "$" sign in your response.)

  Contribution of each surfboard was $  


Explanation: