Question

Todrick Company is a merchandiser that reported the following information based on 1,000 units sold:

Sales	$	285,000
Beginning merchandise inventory	$	19,000
Purchases	$	190,000
Ending merchandise inventory	$	9,500
Fixed selling expense	$	?
Fixed administrative expense	$	11,400
Variable selling expense	$	14,250
Variable administrative expense	$	?
Contribution margin	$	57,000
Net operating income	$	17,100

Required:

1. Prepare a contribution format income statement.

2. Prepare a traditional format income statement

Prepare a contribution format income statement.

	Todrick Company Contribution Format Income Statement Sales $285,000 Variable expenses: Cost of goods sold $199,500 Administrative expense 14,250 Selling expense 14,250 228,000 Contribution margin 57,000 Fixed expenses: Selling expense $28,500 Administrative expense 11,400 39,900 Net operating income $17,100

Prepare a traditional format income statement.

	Todrick Company Traditional Income Statement Sales $285,000 Cost of goods sold 199,500 Gross margin 85,500 Selling and administrative expenses: Selling expense Administrative expense 0 Net operating income

Answer 1