Ava's Hats Is a Small E-Tail Business Specializing in the Hand

question 286

Essay

Ava's Hats is a small e-tail business specializing in the hand crocheted hats for infants and toddlers over the web.The business is owned by a sole proprietor and operated out of her home.Results for last year are as follows:

For internal planning and decision-making purposes,the owner of Ava's Hats would like to translate the company's income statement into the contribution margin format.Since Ava's Hats is an e-tailer,all of its cost of goods sold was variable.A large portion of the selling and marketing expenses consisted of freight-out charges ($16,500),which were also variable.Only 25% of the remaining selling and marketing expenses and 20% of the website expenses were variable.Of the other operating expenses,90% were fixed.
Based on this information,prepare Ava's Hats' contribution margin income statement for last year.

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Definitions:

Social Status

An individual's position or rank within the social hierarchy, determined by wealth, occupation, education, and other factors.

Health Services

A broad range of medical or health-related services aimed at maintaining, enhancing, or managing the health of individuals.

Social Support

The assistance and comfort received from friends, family, and others, which can significantly impact an individual's mental and physical health.

Income

The money received, usually on a regular basis, for work or through investments.