Question

Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: $ 270,000 $ 18,000 $ 180,000 9,000 A A eBook Sales Beginning merchandise inventory Purchases Ending merchandise inventory Fixed selling expense Fixed administrative expense Variable selling expense Variable administrative expense Contribution margin Net operating income A 10,800 13,500 A Print A A Ferences $ 54,000 16,200

Answer 1

Contribution Format Income Statement
Sales	270,000
Less: Variable costs
Cost of goods sold	189,000
Variable selling expenses	13,500
variable admin expenses	13,500
Total variable expenses	216,000
Contribution Margin	54,000
Less: Fixed costs
Fixed selling expense	27,000
Fixed admin expense	10,800
Total Fixed expenses	37,800
Net operating income	16,200
Traditional format income statement
Sales	270,000
Less: Cost of goods sold	189,000
Gross Margin	81,000
Less: Selling expenses	40,500
Admin Expenses	24,300
Net operating income	16,200
Selling price per unit	270
Variable cost per unit	216
Contribution Margin per unit	54
6.Contribution Margin format income statement as fixed costs remain constant within the relevant range

B 270000 =18000+180000-9000 13500 =B7-B4-B5 =B2-B8 54000 А 1 Contribution Format Income Statement 2 Sales 3 Less: Variable costs 4 Cost of goods sold 5 Variable selling expenses 6 variable admin expenses 7 Total variable expenses 8 Contribution Margin 9 Less: Fixed costs 10 Fixed selling expense 11 Fixed admin expense 12 Total Fixed expenses 13 Net operating income 14 15 Traditional format income statement 16 Sales 17 Less: Cost of goods sold 18 Gross Margin 19 Less: Selling expenses 20 Admin Expenses 21 Net operating income 22 23 Selling price per unit 24 Variable cost per unit 25 Contribution Margin per unit 26 6. Contribution Margin format income statement as fixed costs remain constant within the relevant range =B12-B11 10800 =B8-B13 16200 270000 =B4 =B16-B17 =B5+B10 =B6+B11 =B18-SUM(B19:B20) =B2/1000 =B7/1000 =B23-B24