Question

The

Yummy

Ice Cream Shoppe sold

9,400

servings of ice cream during June for

$4

per serving. The shop purchases the ice cream in large tubs from the

Golden

Ice Cream Company. Each tub costs the shop

$15

and has enough ice cream to fill

30

ice cream cones. The shop purchases the ice cream cones for

$0.05

each from a local warehouse club. Located in an outdoor​ mall, the rent for the shop space is

$1,800

per month. The shop expenses

$240

a month for the depreciation of the​ shop's furniture and equipment. During​ June, the shop incurred an additional

$2,300

of other operating expenses

​(75​%

of these were fixed​ costs). Read the requirements

LOADING...

.

Requirement 1. Prepare The

Yummy

Ice Cream​ Shoppe's June income statement using a traditional format.

The Yummy Ice Cream Shoppe
Income Statement
For the Month Ended June 30
Sales revenue			37600
Less:	Cost of goods sold
Gross profit
Less:	Operating expenses
	Lease expense
	Depreciation expense
	Other Operating expenses
Operating income

Requirement 2.) Prepare the Yummy Ice Cream shop's June income statement using a contribution margin format.

Answer 1

Contribution Margin Statement

Particular	Amount	Amount
Sales (9,400 units * $4 each)		$37,600
Less: Variable cost
Cost of good sold	$5,170
Operating expenses (2,300 * 25%)	$575	$5,745
Contribution Margin		$31,855
Less: Fixed cost
Rent	$1,800
Shop expenses	$240
Other operating expenses (2,300 * 75%)	$1,725	$3,765
Operating profit		$28,090

Cost of good sold per cone = Cost of good sold + Cost of cone = 0.50 + 0.05 = 0.55

Cost of ice cream per cone = $15/30 = $0.50

Cost of good sold = Cost per cone * Number of cones

= $0.55 * 9,400

= $5,170