Cherokee Inc. is a merchandiser that provided the following information: Number of units sold 13,000 Selling price per unit $ 17 Variable selling expense per unit $2 Variable administrative expense per unit $ 1 Total fixed selling expense $ 20,000 Total fixed administrative expense $ 14,000 Beginning merchandise inventory $ 10,000 Ending merchandise inventory $ 25,000 Merchandise purchases $ 89,000 Required 1) Prepare a traditional income statement. 2 )Prepare a contribution format income statement.
Cherokee Inc. is a merchandiser that provided the following information: Number of units sold 13,000 Selling price per unit $ 17 Variable selling expense per unit $2 Variable administrative expense per unit $ 1 Total fixed selling expense $ 20,000 Total fixed administrative expense $ 14,000 Beginning merchandise inventory $ 10,000 Ending merchandise inventory $ 25,000 Merchandise purchases $ 89,000 Required 1) Prepare a traditional income statement. 2 )Prepare a contribution format income statement.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter5: Inventories And Cost Of Goods Sold
Section: Chapter Questions
Problem 5.4DC
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Cherokee Inc. is a merchandiser that provided the following information: Number of units sold
13,000 Selling price per unit $ 17 Variable selling expense per unit $2 Variable administrative
expense per unit $ 1 Total fixed selling expense $ 20,000 Total fixed administrative expense $
14,000 Beginning merchandise inventory $ 10,000 Ending merchandise inventory $ 25,000
Merchandise purchases $ 89,000 Required
1) Prepare a traditional income statement.
2 )Prepare a contribution format income statement.
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