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e https://mailgoogle com/mail/u/0/#nbox/161e4cS06e42362?projector: 1&messagef; aSearch 3) Betsy's Gift Baskets sells gift baskets, on average, for $125; each gift basket costs, on average, $60. Betsy pays salaries each month of S1,300 and her store rent is $1,000 per month. She also pays sales commissions of 5% of the sales price. In May, 140 gift baskets were sold. Required: b. Prepare a contribution margin income statement for the month of May a traditional income statement for the month of May sly Limited, a manufacturer of a variety of products, uses an activity-based costing system. Information from its system for the year for all products follows $584,20023,000 machine-hours S341,700 524,480 8,500 inspection-hours 160 orders Bilingsly Limited makes 450 of its product B63 per customer orders, which requires a total of 53 machine hours, 13 inspection hours, and 19 orders. Product B63 requires $45.70 in direct materials per unit and $58.20 in direct labor per unit. Product B63 sells for $265 per unit. If all 450 units are sold, what is the product (gross) margin in total for Product B632 (7 points) Scanned by CamScanner

Explanation / Answer

Q3. Req A: Traditional Income Statement Sales revenue (140 units @$125) 17500 Less: Cost of goods sold (140 units @$60) 8400 Gross margin 9100 Less: operating expense Salaries 1300 Store rent 1000 Sales commission @5% of sales revenue 875 Net operating income 5925 Req B: CONTRIBUTION MARGIN INCOME STATEMENT: Sales revenue (140 units @$125) 17500 Less: variable cost Cost of goods sold 8400 Sales commission @5% of sales revenue 875 Contribution margin earned 8225 Less: Fixed cost Salaries 1300 Store rent 1000 Nnet operating income 5925

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