Debby's Gift Baskets sells gift baskets, on average, for $100. Each gift basket costs, on average, $55. Debby pays salaries each month of $1,500, and her store rent is $1,000 per month. She also pays sales commissions of 10% of the sales price. In May, 150 gift baskets were sold.
Required:
1. Prepare a traditional income statement for the month of May.
2. Prepare a contribution margin income statement for the month of May.

Question

Quizplus · Accepted Answer

The Answer of Debby's Gift Baskets sells gift baskets, on average, for $100. Each gift basket costs, on average, $55. Debby pays salaries each month of $1,500, and her store rent is $1,000 per month. She also pays sales commissions of 10% of the sales price. In May, 150 gift baskets were sold.
Required:
1. Prepare a traditional income statement for the month of May.
2. Prepare a contribution margin income statement for the month of May.

Debby's Gift Baskets Sells Gift Baskets, on Average, for $100