Chapter 1 Homeworlk 5 Number of units sold Selling price per

Chapter 1 Homeworlk 5 Number of units sold Selling price per unit Variable selling expense per unit Variable administrative expense per unit $ Total fixed selling expense Total fixed administrative expense Beginning merchandise inventory Ending merchandise inventory Merchandise purchases 13,880 $17 $19,000 $14,000 $10,000 23,000 $87,000 polnts eBook Print Required: 1. Prepare a traditional income statement. 2 Prepare a contribution format income statement. Reférences Complete this question by entering your answers in the tabs below

Solution

1 Traditional Income Statement Sales (13000 x $17) 221000 Cost of goods sold ($10000 + $87000 - $23000) 74000 Gross profit 147000 Selling and administrative expenses: Fixed selling expense 19000 Variable selling expense (13000 x $2) 26000 Fixed administrative expense 14000 Variable administrative expense (13000 x $2) 26000 85000 Net operating income $ 62000 2 Contribution Format Income Statement Sales 221000 Variable expenses: Cost of goods sold 74000 Selling expense 26000 Administrative expense 26000 Total variable expenses 126000 Contribution margin 95000 Fixed expenses: Selling expense 19000 Administrative expense 14000 Total fixed expense 33000 Net operating income $ 62000