- Problem 1 19 Algo Traditional And Contribution Format Income Statements Lo1 6 Todrick Company Is A Merchandiser That 1 (151.23 KiB) Viewed 42 times
Problem 1-19 (Algo) Traditional and Contribution Format Income Statements [LO1-6] Todrick
Company is a merchandiser that reported the following information based on 1,000 units sold: Sales Beginning merchandise inventory Purchases Ending merchandise inventory Fixed selling expense Fixed administrative expense Variable selling expense Variable administrative expense Contribution margin Net operating income Required: 1. Prepare a contribution format income
statement. 2. Prepare a traditional format income
statement. 3. Calculate the selling price per unit. $ 330,000 $ 22,000 $ 220,000 $ 11,000 ? $ 13,200 $ 16,500 ? $ 66,000 $ 19,800 4. Calculate the variable cost per unit. 5. Calculate the contribution margin per unit. 6. Which income
statement format (traditional format or contribution format) would be more useful to managers in estimating how net operating income will change in response to changes in unit sales?
Req 1 Req 2 Req 3 to 5 Prepare a traditional format income
statement. Administrative expense Administrative expense Todrick
Company Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expense Fixed manufacturing overhead Net operating income Req 6 Traditional Income
Statement Req 1 16,500X 16,500 X 13,200 x 33,000 X $ $ 330,000 231,000 99,000 79,200 19,800 Req 3 to 5 >