2 CoursHeroTranscribedText: 2) The 4 x 4 Shop is a large retailer of...
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Accounting
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CoursHeroTranscribedText: 2) The 4 x 4 Shop is a large retailer of equipment for pickup trucks. An income statement for the company's Bed Liner Department for the most recent quarter is presented below: 8 Marks The 4 x 4 Shop Income Statement - Bed Liner Department for First Quarter of Current Year Sales $700,000 Less: Cost of Goods Sold 250,000 Gross Margin $450,000 Less: Operating Expenses: Selling Expenses $200,020 Administrative Expenses 190,000 390,020 Net Income $59,980 The liners sell, on average, for $350 each. The department's variable selling expenses are $35 per liner sold. The remaining selling expenses are fixed. The administrative expenses are 25% variable and 75% fixed. The company purchases its liners from a supplier at a cost of $125 per liner. Required: Prepare an income statement for the quarter, using the contribution approach. 8 Marks
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