Sales $ 435,000 Beginning merchandise inventory $ 29,000 Purchases $ 290,000 Ending merchandise inventory $ 14,500 Fixed selling expense ? Fixed administrative expense $ 17,400 Variable selling expense $ 21,750 Variable administrative expense ? Contribution margin $ 87,000 Net operating income $ 26,100 Required: 1. Prepare a contribution format income statement. 2. Prepare a traditional format income statement. 3. Calculate the selling price per unit. 4. Calculate the variable cost per unit. 5. Calculate the contribution margin per unit.
Sales $ 435,000 Beginning merchandise inventory $ 29,000 Purchases $ 290,000 Ending merchandise inventory $ 14,500 Fixed selling expense ? Fixed administrative expense $ 17,400 Variable selling expense $ 21,750 Variable administrative expense ? Contribution margin $ 87,000 Net operating income $ 26,100 Required: 1. Prepare a contribution format income statement. 2. Prepare a traditional format income statement. 3. Calculate the selling price per unit. 4. Calculate the variable cost per unit. 5. Calculate the contribution margin per unit.
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 5.12MCP
Related questions
Question
| Sales | $ 435,000 |
|---|---|
| Beginning merchandise inventory | $ 29,000 |
| Purchases | $ 290,000 |
| Ending merchandise inventory | $ 14,500 |
| Fixed selling expense | ? |
| Fixed administrative expense | $ 17,400 |
| Variable selling expense | $ 21,750 |
| Variable administrative expense | ? |
| Contribution margin | $ 87,000 |
| Net operating income | $ 26,100 |
Required:
1. Prepare a contribution format income statement.
2. Prepare a traditional format income statement.
3. Calculate the selling price per unit.
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?
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