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The 4 x 4 Shop is a large retailer of equipment for pickup trucks. An...

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Accounting

The 4 x 4 Shop is a large retailer of equipment for pickup trucks. An income statement for the company's Bed Liner Department for the most recent quarter is presented below:
The 4 x 4 Shop
Income Statement - Liner Department
For First Quarter of Current Year
Sales $700,000
Less: Cost of goods sold 250,000
Gross margin 450,000
Less: Operating expenses:
Selling expenses $195,000
Administrative expenses 145,000340,000
Net income $110,000
The liners sell, on average, for $350 each.
The department's variable selling expenses are $53 per liner sold. The remaining selling expenses are fixed.
The administrative expenses are 22% variable and 78% fixed. The company purchases its liners from a supplier at a cost of $125 per liner.
Required:
Prepare an income statement for the quarter, using the contribution approach.

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