Question

Milden Company is a merchandiser that plans to sell 37,000 units during the next quarter at a selling price of $55 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 $27 per unit sold $184,000 per quarter 5% of sales $24,000 per quarter + $5.00 per unit sold $94,000 per quarter $10,400 per quarter $64,000 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. 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

Answer 1

Milden company Milden company 1.contribution format income statement 2.Traditional format income statement for the next quarter for the next quarter sales =37000*55 sales 2,035,000 2,035,000 variable expenses : cost of goods sold 999,000 cost of goods sold =37000*27 Gross margin 999,000 1,036,000 selling and administrative expense : sales commission =2035000*0.05 101,750 advertising expense shipping expnese =37000*5 185,000 184,000 administrative salaries 94,000 insurance expense 10,400 Total variable expense 1,285,750 depreciation expense 64,000 contribution margin 749,250 sales commission 101,750 fixed expense : shipping expnese =185000+24000 209,000 advertising expense shipping expnese 184,000 24,000 administrative salaries Total selling and administrative expense : 94,000 663,150 net operating income insurance expense 10,400 372,850 depreciation expense 64,000 Total fixed expense 376,400 net operating income 372,850