Prepare traditional and contribution margin income statements
The Fantastic Ice Cream Shoppe sold 8,800 servings of ice cream during June for $5 per serving. The shop purchases the ice cream in large tubs from the Deluxe Ice Cream Company. Each tub costs the shop S14 and has enough ice cream to fill 28 ice cream cones. The shop purchases the ice cream cones for $0.15 each from a local ware¬house club. The Fantastic Ice Cream Shoppe is located in a strip mall, and rent for the space is $2,050 per month. The shop expenses $220 a month for the depreciation of the shop's furniture and equipment. During June, the shop incurred an additional $2,800 of other operating expenses (75% of these were fixed costs).
Requirements
1. Prepare The Fantastic Ice Cream Shoppe's June income statement using a traditional format.
2. Prepare The Fantastic Ice Cream Shoppe's June income statement using a contribution margin format.