Reference no: EM132316103

Question

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 $3,600 each. Variable selling expenses are $210 per ATV. The remaining selling expenses are fixed. Administrative expenses are 80% variable and 20% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,810 each.

PDLARIX

Income Statement-Consumer ATV Department

For Year Ended December 31, 2017

Sales                                6633,600

Cost of goods sold                          318.560

Gross margin                          316,040

Operating expenses

Selling expenses              slie.eee

Administrative expenses          42.200    1/2./00

Net income                           $142,340

Required:

Prepare an income statement for this current year using the contribution margin format.