The Alpine House, Inc. is a large retailer of winter sports equipment. Here is an income statement for the companys Ski department for a recent quarter:
THE ALPINE HOUSE, INC.
Income StatementSki Department
For the Quarter Ended March
Sales $
Less: Cost of goods sold
Gross margin
Less: Operating expenses:
Selling expenses $
Administrative expenses
Net income $
On average, skis sell for $ per pair. Variable selling expenses are $ per pair of skis sold. The remaining selling expenses are fixed. The administrative expenses are variable and fixed. The company does not manufacture its own skis; it purchases them from a supplier for $ per pair.
Required:
Prepare a contribution margin income statement for the quarter. For every pair of skis sold during the quarter, what was the contribution toward covering fixed expenses and toward earning profits?
