Question

Todrick Company is a merchandiser that reported the following information based on 1,000 units sold:

Sales	$	465,000
Beginning merchandise inventory	$	31,000
Purchases	$	310,000
Ending merchandise inventory	$	15,500
Fixed selling expense	$	?
Fixed administrative expense	$	18,600
Variable selling expense	$	23,250
Variable administrative expense	$	?
Contribution margin	$	93,000
Net operating income	$	27,900

Prepare a contribution format income statement.

Todrick Company Contribution Format Income Statement Sales Variable expenses: Cost of goods sold Selling expense Administrative expense 0 Contribution margin 93,000 Fixed expenses: Administrative expense 18,600 Selling expense 46,500 65,100 Net operating income

Prepare a traditional format income statement.

Calculate the selling price per unit, the variable cost per unit, Calculate the contribution margin per unit.

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Answer 1

465000 Requirement: 1 Todrick Company Contribution Format Income Statement Sales Variable expenses: Cost of goods sold 325500 Selling expense 23250 Administrative expense 23250 372000 93000 Total variable expenses Contribution margin Fixed expenses: Selling expense Administrative expense 46500 18600 65100 Total fixed expenses Net Operating income 27900

465000 Requirement: 2 Todrick Company Traditional Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expense 325500 139500 69750 41850 111600 Total selling and administrative expenses Net operating income 27900 Requirement: 3 Selling price per unit = Sales / Units sold Sales Units sold Selling price per unit 465000 1000 465 Requirement: 4 Variable cost per unit = Total variable cost / Units Total variable cost units Variable cost per unit 372000 1000 372

Requirement: 5 Contribution margin per unit = Contribution margin / units sold Contribution margin 93000 Units sold 1000 Contribution margin per unit 931