Sally's Gift Baskets sells gift baskets,on average,for $125;each gift basket costs,on average,$60.Debby pays salaries each month of $1,300 and her store rent is $1,000 per month.She also pays sales commissions of 5% of the sales price.In May,140 gift baskets were sold.
Required:
a.Prepare a traditional income statement for the month of May.
b.Prepare a contribution margin income statement for the month of May.

Question

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The Answer of Sally's Gift Baskets sells gift baskets,on average,for $125;each gift basket costs,on average,$60.Debby pays salaries each month of $1,300 and her store rent is $1,000 per month.She also pays sales commissions of 5% of the sales price.In May,140 gift baskets were sold.
Required:
a.Prepare a traditional income statement for the month of May.
b.Prepare a contribution margin income statement for the month of May.

Sally's Gift Baskets Sells Gift Baskets,on Average,for $125;each Gift Basket