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ricardorendon100
ricardorendon100
25.03.2020 • 
Business

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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