Chapter 1 Applying Excel Data Sales Variable costs 12000 Cos

Chapter 1: Applying Excel Data Sales Variable costs: $12,000 Cost of goods sold Variable selling Variable administrative $6,0001- $600 $400 Fixed costs: Fixed seling $2,500 $1,500 Fixed administrative Enter a formula into each of the cells marked with a ? below Exhibit 1-7 Traditional Format Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling Administrative Net operating income Contribution Format Income Statement Sales Variable expenses: Cost of goods sold Variable selling Variable administration Contribution margin Fixed expenses Fixed selling Fixed administrative Net operating income

Solution

Traditional Format income statement

Contribution format income statement

sales

12000

sales

12000

less cost of goods sold

6000

less variable cost

7000

gross profit

6000

cost of goods sold

6000

less selling and administrative expenses

2500+600

3100

variable selling expenses

600

administrative expenses

1500+400

1900

variable administrative expenses

400

net operating profit

1000

contribution margin

5000

less fixed expenses

4000

fixed selling expenses

2500

fixed administrative expenses

1500

1000

Traditional Format income statement				Contribution format income statement
sales		12000		sales		12000
less cost of goods sold		6000		less variable cost		7000
gross profit		6000		cost of goods sold	6000
less selling and administrative expenses	2500+600	3100		variable selling expenses	600
administrative expenses	1500+400	1900		variable administrative expenses	400
net operating profit		1000		contribution margin		5000
				less fixed expenses		4000
				fixed selling expenses	2500
				fixed administrative expenses	1500	1000