Exercise 1-6 Traditional and Contribution Format Income Statements [LO1-6]Cherokee Inc. is a merchandiser that provided the following information: AmountNumber of units sold 20,000Selling price per unit$30Variable selling expense per unit$4Variable administrative expense per unit$2Total fixed selling expense$40,000Total fixed administrative expense$30,000Beginning merchandise inventory$24,000Ending merchandise inventory$44,000Merchandise purchases$180,000 Required:1. Prepare a traditional income statement.2. Prepare a contribution format income statement.

Answered: Exercise 1-6 Traditional and…

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Inventories

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Problem 6.3TIF: Communication Golden Eagle Company began operations on April 1 by selling a single product. Data on...

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Exercise 1-6 Traditional and Contribution Format Income Statements [LO1-6]

Cherokee Inc. is a merchandiser that provided the following information:

	Amount
Number of units sold		20,000
Selling price per unit	$	30
Variable selling expense per unit	$	4
Variable administrative expense per unit	$	2
Total fixed selling expense	$	40,000
Total fixed administrative expense	$	30,000
Beginning merchandise inventory	$	24,000
Ending merchandise inventory	$	44,000
Merchandise purchases	$	180,000

Required:

1. Prepare a traditional income statement.

2. Prepare a contribution format income statement.

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