Answer to Ma1

Exercise 5-4

1.

|THE ALPINE HOUSE, INC. |

|Income Statement—Ski Department |

|For the Quarter Ended March 31 |

|Sales | |$150,000 |

|Less variable expenses: | | |

|Cost of goods sold (200 pairs* × $450 per pair) |$90,000 | |

|Selling expenses (200 pairs × $50 per pair) |10,000 | |

|Administrative expenses (20% × $10,000) |   2,000 | 102,000 |

|Contribution margin | |48,000 |

|Less fixed expenses: | | |

|Selling expenses |20,000 | |

|[$30,000 – (200 pairs × $50 per pair)] | | |

|Administrative expenses (80% × $10,000) |   8,000 |   28,000 |

|Net operating income |...