Problem: Haaki Shop, Inc., is a large retailer of surfboards. The company assembled the information shown below for the quarter ended May 31:
|
|
|
Amount
|
|
Total sales revenue
|
$
|
1,364,000
|
|
Selling price per surfboard
|
$
|
440
|
|
Variable selling expense per surfboard
|
$
|
47
|
|
Variable administrative expense per surfboard
|
$
|
18
|
|
Total fixed selling expense
|
$
|
145,000
|
|
Total fixed administrative expense
|
$
|
115,000
|
|
Merchandise inventory, beginning balance
|
$
|
75,000
|
|
Merchandise inventory, ending balance
|
$
|
105,000
|
|
Merchandise purchases
|
$
|
280,000
|
Require to do:
Question 1. Prepare a traditional income statement for the quarter ended May 31.
Question 2. Prepare a contribution format income statement for the quarter ended May 31.
Question 3.What was the contribution toward fixed expenses and profits for each surfboard sold during the quarter?