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The Dairy Ice Cream Shoppe sold 9, 400 servings of ice cream during June for $3 per serving. The shop purchases the ice cream in large tubes from the BlueBell Ice Cream Company. Each tub costs the shop $9 and has enough ice cream cones. The shop purchases the ice cream cones for $0.10 each from a local warehouse club. The Dairy Ice Cream Shoppe is located strip mall, and rent for the space is $1, 850 per month. The shop expenses $230 a month for the depreclation of the shop's furniture and equipment. During June, the shop incurred an additional $2, 700 of other operating expenses (75% of these were fixed costs).

Required:
a. Prepare The Dairy Ice Cream Shoppe's June income statement using a traditional format.
b. Prepare The Dairy Ice Cream Shoppe's June income statement using a contribution margin format.

Sagot :

Answer:

Contribution Margin:

Gross Profit / Revenue =  $21,620 /  $28,200

Contribution Margin is 76%

Explanation:

Income Statement for Dairy Ice Cream Shoppe

Revenue [9,400 servings *  $3 per serving] =  $28,200

Cost of Sales [ 9,400 servings *  $9 / 15 cones + 0.10 per cone] =  $6,580

Gross Profit =  $21,620

Less Operating expense :

Rent Expense  $1,850

Shop Expense  $230

Other operating expenses  [$2,700 * 75%]  $2,025

Operating profit  $17,515

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