Prepare an income statement for the quarter

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Reference no: EM132876844

Question - An income statement for the company's Bed Liner Department for the most recent quarter is presented below:

The 4 × 4 Shop Income Statement - Liner Department for First Quarter of Current Year

Sales $700,000

Less: Cost of goods sold 250,000

Gross margin $450,000

Less: Operating expenses: Selling expenses $195,000

Administrative expenses 145,000 340,000

Net income $110,000

The liners sell, on average, for $350 each. The department's variable selling expenses are $35 per liner sold. The remaining selling expenses are fixed. The administrative expenses are 25% variable and 75% fixed. The company purchases its liners from a supplier at a cost of $125 per liner.

Required - Prepare an income statement for the quarter, using the contribution approach.

Reference no: EM132876844

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