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 $4,400 each. Variable selling expenses are $280 per ATV. The remaining selling expenses are fixed. Administrative expenses are 30% variable and 70% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,850 each. POLARIXIncome Statement—Consumer ATV DepartmentFor Year Ended December 31 Sales $633,600 Cost of goods sold 266,400 Gross margin 367,200 Operating expenses Selling expenses$160,000 Administrative expenses 40,800 200,800 Net income $166,400 Required: 1. Prepare an income statement for the current year using the contribution margin format. (Do not round intermediate calculations. Round contribution margin per ATV value to the nearest whole number.) POLARIXIncome Statement - Consumer ATV DepartmentFor Year Ended December 31Sales|-Net income (loss)2. For each ATV sold during this year, what is the contribution toward covering fixedexpenses and earning income?Contribution margin per ATV:

The income statement is prepared to find the net income for the business.

Answered: Polarix is a retailer of ATVs…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 2MC: The following information is available for Cooke Company for the current year: The gross margin is...

See similar textbooks

Related questions

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 $4,400 each. Variable selling expenses are $280 per ATV. The remaining selling expenses are fixed. Administrative expenses are 30% variable and 70% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,850 each.

POLARIX Income Statement—Consumer ATV Department For Year Ended December 31
Sales			$	633,600
Cost of goods sold				266,400
Gross margin				367,200
Operating expenses
Selling expenses	$	160,000
Administrative expenses		40,800		200,800
Net income			$	166,400

Required:
1. Prepare an income statement for the current year using the contribution margin format. (Do not round intermediate calculations. Round contribution margin per ATV value to the nearest whole number.)

POLARIX
Income Statement - Consumer ATV Department
For Year Ended December 31
Sales
|-
Net income (loss)
2. For each ATV sold during this year, what is the contribution toward covering fixed
expenses and earning income?
Contribution margin per ATV:

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.