The x 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:
The x Shop
Income Statement Liner Department
For First Quarter of Current Year
Sales $
Less: Cost of goods sold
Gross margin
Less: Operating expenses:
Selling expenses $
Administrative expenses
Net income $
The liners sell, on average, for $ each.
The department's variable selling expenses are $ per liner sold. The remaining selling expenses are fixed.
The administrative expenses are variable and fixed. The company purchases its liners from a supplier at a cost of $ per liner.
Required:
Prepare an income statement for the quarter, using the contribution approach.
