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    Preparation of a Contribution Income Statement

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    Uncle Ralph's sells cookies in a large shopping mall. The following multi-step income statement was prepared for the year ending December 31, 2004.

    Sales $36,000
    Cost of Good Sold 4,000
    Gross Profit 32,000
    Operating Expense:
    Selling Expense $18,000
    Admin Expense 10,000 (28,000)
    Operating Income 4,000

    Cost of goods sold is a variable cost. Selling expense is 20 % variable and 80% fixed, and administrative expense is 5% variable and 95% fixed.

    Required: Prepare a contribution income statement for Ralph's Cookie Co.
    Please set up this contribution income statement and solve.

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    https://brainmass.com/business/income-statement/preparation-of-a-contribution-income-statement-170447

    Solution Preview

    Attached, please find a formatted MS Excel spreadsheet containing the answers to the questions below, as well as notes that explain how the various accounts are to be calculated. Please feel free to contact me again in the future in the event that additional assistance is required.

    Prepare a contribution income statement
    Uncle Ralph's sells cookies in a large ...

    Solution Summary

    This file contains a formatted MS Excel spreadsheet containing the answers to the questions below, as well as notes that explain how the various accounts in a contribution income statement are to be calculated.

    $2.19

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