Ava's Needlework is a small e-tail business specializing in the hand crocheted hats for infants and toddlers over the web.The business is owned by a sole proprietor and operated out of her home.Results for last year are as follows:

For internal planning and decision-making purposes,the owner of Ava's Needlework would like to translate the company's income statement into the contribution margin format.Since Ava's needlework is an e-tailer,all of its cost of goods sold was variable.A large portion of the selling and marketing expenses consisted of freight-out charges ($15,200),which were also variable.Only 20% of the remaining selling and marketing expenses and 25% of the website expenses were variable.Of the other operating expenses,80% were fixed.
Based on this information,prepare Ava's Needlework's contribution margin income statement for last year.

Question

Ava's Needlework is a small e-tail business specializing in the hand crocheted hats for infants and toddlers over the web.The business is owned by a sole proprietor and operated out of her home.Results for last year are as follows:
  
For internal planning and decision-making purposes,the owner of Ava's Needlework would like to translate the company's income statement into the contribution margin format.Since Ava's needlework is an e-tailer,all of its cost of goods sold was variable.A large portion of the selling and marketing expenses consisted of freight-out charges ($15,200),which were also variable.Only 20% of the remaining selling and marketing expenses and 25% of the website expenses were variable.Of the other operating expenses,80% were fixed.
Based on this information,prepare Ava's Needlework's contribution margin income statement for last year.

Quizplus · Accepted Answer

The Answer of Ava's Needlework is a small e-tail business specializing in the hand crocheted hats for infants and toddlers over the web.The business is owned by a sole proprietor and operated out of her home.Results for last year are as follows:
  
For internal planning and decision-making purposes,the owner of Ava's Needlework would like to translate the company's income statement into the contribution margin format.Since Ava's needlework is an e-tailer,all of its cost of goods sold was variable.A large portion of the selling and marketing expenses consisted of freight-out charges ($15,200),which were also variable.Only 20% of the remaining selling and marketing expenses and 25% of the website expenses were variable.Of the other operating expenses,80% were fixed.
Based on this information,prepare Ava's Needlework's contribution margin income statement for last year.

Ava's Needlework Is a Small E-Tail Business Specializing in the Hand