Question

Assignment 6 Saved Mlilden Company is a merchandiser that plans to sell 35,000 units during the next quarter at a selling price of $56 per company also gathered the following cost estimates for the next quarter Cost Cost of good sold Advertising expense Sales commissions Shipping expense Administrative salaries Insurance expense Depreciation expense Cost Formula $26 per unit sold $183,ee0 per quarter 6% of sales $57,ee0 per quarter $4.ee per unit sold $93,800 per quarter $10,300 per quarter $63,e00 per quarter Required: 1. Prepare a contribution format income statement for the next quarter. 2. Prepare a traditional format income statement for the next quarter. Complete this question by entering your answers in the tabs below Required 1 Required 2 Prepare a contribution format income statement for the next quarter Milden Company Contribution Format Income Statement For the Next Quarter Prev 1 of 3E Next>

Answer 1

Milden Company
Traditional Format Income Statement
For the Next Quarter
Sales		$ 19,60,000.00
Cost of goods sold		$   9,10,000.00
Gross margin		$ 10,50,000.00
Selling and administrative expenses:
Advertising expense	$1,83,000.00
Sales commission	$1,17,600.00
Shipping expense	$1,97,000.00
Administrative salaries	$   93,000.00
Insurance expense	$   10,300.00
Depreciation expense	$   63,000.00
Total selling and administrative expenses		$   6,63,900.00
Net operating income		$     3,86,100.00

Milden Company
Contribution margin Income statement
For the Next Quarter
Sales		$ 19,60,000.00
Less: Variable costs
Variable Cost of goods sold	$   9,10,000.00
Variable selling expenses	$   1,40,000.00
Variable selling commission	$   1,17,600.00
Total Variable cost		$ 11,67,600.00
Contribution margin		$   7,92,400.00
Less: Fixed Costs
Advertising expense	$   1,83,000.00
Shipping expenses	$       57,000.00
Administrative salaries	$       93,000.00
Insurance expense	$       10,300.00
Depreciation expense	$       63,000.00
Total Fixed Costs		$   4,06,300.00
Net Income		$   3,86,100.00

Working

Sales	[35000 units x $56]
Less: Variable costs
Cost of Goods Sold	[35000 units x $26]
Sales Commission	[35000 unis x $56 x 6%]
Shipping expenses	[34000 units x $4]