Question

oter 1 Graded Homework A Saved Amount 13,000 17 Number of units sold Selling price per unit Variable selling expense per unit Variable administrative expense per unit Total fixed selling expense Total fixed administrative expense Beginning merchandise inventory Ending merchandise inventory Merchandise purchases $ 20,000 $ 16,000 $ 10,000 $ 22,000 $ 90,000 4:54:44 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Book Hint Complete this question by entering your answers in the tabs below. Print Required 1 Required 2 Prepare a traditional income statement. erences Cherokee, Inc. 22,000 Traditional Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses < Prey 6 of

Answer 1

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	Alpine House
	Traditional Income statement
	Sales		$   9,68,000
Less:	Cost of goods sold		$   2,65,000
	Gross Profit		$   7,03,000
Less:	Selling and administrative expenses
	Selling Expense [(2200 units X $45) + $140000]	$ 2,39,000
	Advertising expense [(2200 units X $19) + $115000]	$ 1,56,800
			$   3,95,800
	Net operating Income		$   3,07,200
	Workings:
	Selling units	=	$968000 / $440
		=	2,200
	Cost of goods sold	=	Beginning inventory + Purchases - Ending Inventory
		=	$65,000 + $310,000 - $110000
		=	$   2,65,000
	Alpine House
	Contribution Income statement
	Sales		$   9,68,000
Less:	Variable cost
	Cost of goods sold	$ 2,65,000
	Selling Expense (2200 units X $45)	$     99,000
	Advertising expense (2200 units X $19)	$     41,800
	Total Variable cost		$   4,05,800
	Contribution margin		$   5,62,200
Less:	Fixed expenses
	Selling Expense	$ 1,40,000
	Advertising expense	$ 1,15,000
			$   2,55,000
	Net operating Income		$   3,07,200
	Workings:
	Selling units	=	$968000 / $440
		=	2,200
	Cost of goods sold	=	Beginning inventory + Purchases - Ending Inventory
		=	$65,000 + $310,000 - $110000
		=	$   2,65,000
3	Contribution margin per unit	=	Total Contribution / Selling units
		=	$562200 / 2200 units
		=	$             256