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 $3,800 each. Variable selling expenses are $270 per ATV. The remaining selling expenses are fixed. Administrative expenses are 40% variable and 60% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,830 each. POLARIXIncome Statement—Consumer ATV DepartmentFor Year Ended December 31, 2017 Sales $ 646,000 Cost of goods sold 311,100 Gross margin 334,900 Operating expenses Selling expenses $ 135,000 Administrative expenses 59,500 194,500 Net income $ 140,400 Required: 1. Prepare an income statement for this current year using the contribution margin format. (Do not round intermediate calculations. Round contribution margin per ATV value to the nearest whole number.)
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 $3,800 each. Variable selling expenses are $270 per ATV. The remaining selling expenses are fixed. Administrative expenses are 40% variable and 60% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,830 each. POLARIXIncome Statement—Consumer ATV DepartmentFor Year Ended December 31, 2017 Sales $ 646,000 Cost of goods sold 311,100 Gross margin 334,900 Operating expenses Selling expenses $ 135,000 Administrative expenses 59,500 194,500 Net income $ 140,400 Required: 1. Prepare an income statement for this current year using the contribution margin format. (Do not round intermediate calculations. Round contribution margin per ATV value to the nearest whole number.)
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 18E
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Question
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 $3,800 each. Variable selling expenses are $270 per ATV. The remaining selling expenses are fixed. Administrative expenses are 40% variable and 60% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,830 each.
| POLARIX Income Statement—Consumer ATV Department For Year Ended December 31, 2017 |
||||||
| Sales | $ | 646,000 | ||||
| Cost of goods sold | 311,100 | |||||
| Gross margin | 334,900 | |||||
| Operating expenses | ||||||
| Selling expenses | $ | 135,000 | ||||
| Administrative expenses | 59,500 | 194,500 | ||||
| Net income | $ | 140,400 | ||||
Required:
1. Prepare an income statement for this current year using the contribution margin format. (Do not round intermediate calculations. Round contribution margin per ATV value to the nearest whole number.)
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