Reference no: EM132998334

Crazy Canucks is a small, family-owned retailer specializing in alpine ski and snowboard equipment located in Squamish, B.C. An income statement for the ski department's most recent month is shown below.

CRAZY CANUCKS
Income Statement-Crazy Canucks

For the Month Ended January 31Sales $348,000

Cost of goods sold 208,800

Gross margin 139,200

Selling and administrative expenses:

Selling expenses$69,600

Administrative expenses 23,200 92,800

Operating income $46,400

Skis sell, on average, for $1,500 per pair. Variable selling expenses are $182 per pair of skis sold. The remaining selling expenses are fixed. The administrative expenses are 20% variable and 80% fixed. The company purchases its skis from several suppliers at an average cost of $900 per pair.

Required:

Problem 1. Prepare an income statement for the month using the contribution approach.