Answer:
Results are below.
Explanation:
<u>First, we need to calculate the cost of goods sold:</u>
COGS= beginning finished inventory + cost of goods purchased - ending finished inventory
COGS= 30,000 + 100,000 - 40,000
COGS= 90,000
<u>Now, the number of skis sold:</u>
Units sold= 150,000/750= 200 units
<u>Traditional income statement:</u>
Sales= 150,000
COGS= (90,000)
Gross profit= 60,000
Total selling expense= (50*200 + 20,000)= (30,000)
Total administrative expense= (10*200 + 20,000)= (22,000)
Net operating income= 8,000
<u>Contribution format income statement:</u>
Sales= 150,000
Total variable cost= (90,000 + 50*200 + 10*200)= (102,000)
Contribution margin= 48,000
Total fixed selling expense= (20,000)
Total fixed administrative expense= (20,000)
Net operating income= 8,000
