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 $14 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 contribu¬tion margin format.