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Milden Company is a merchandiser that plans to sell 27,000 units during the next quarter at a selling price of $56 per unit. The 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 $176,000 per quarter 5% of sales $34,000 per quarter 6.00 per unit sold $86,000 per quarter $9,600 per quarter 56,000 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.Prepare a contribution format income statement for the next quarter. Milden Company Contribution Format Income Statement For the Next Quarter Variable expenses: Total variable expenses Contribution margin Fixed expenses: Total fixed expensesRequired 1 Required 2 Prepare a traditional format income statement for the next quarter. Milden Company Traditional Format Income Statement For the Next Quarter Selling and administrative expenses: Total selling and administrative expenses 0

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1. Contribution Format Income Statement Milden Company Contribution Format Income Statement For the next Quarter $1,512,000 Sales [27,000 x $56] Variable Expenses S702,000 [27,000 x $26] $75,600 [S 1 ,512,000 x 5%) S162,000 [27,000 x S6] Cost of Goods Sold Sales Commission Shipping Expenses Total Variable Expenses Contribution margin Fixed Expenses $939,600 $572,400 Advertising Expenses Shipping Expenses Administrative Salaries $176,000 S34,000 $86,000 S9,600 S56,000 Insurance Expense Depreciation Expense Total Fixed Expenses S361,600 Net Operating Income $210,800

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.2. Traditional Format Income Statement Milden Company Traditional Format Income Statement For the next Quarter S1,512,000 127,000 x $56] $702,000 127,000 x $26] Sales Cost of Goods Sold Gross margin $810,000 Selling and Administrative Expenses $75,600 [S 1 ,5 12,000 x 5%) $196,000 [(27,000 x S6) +$34,000] $176,000 $86,000 $9,600 $56,000 Sales Commission Shipping Expenses Advertising Expenses Administrative Salaries Insurance Expense Depreciation Expense Total Selling and Administrative Expenses $599,200 Net Operating Income S210,800

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