Problem 1-19 Traditional and Contribution Format Income Statements [LO1-6] Todrick Company is a merchandiser that reported the...

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Accounting

Problem 1-19 Traditional and Contribution Format IncomeStatements [LO1-6]
Todrick Company is a merchandiser that reported the followinginformation 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.
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 orcontribution format) would be more useful to managers in estimatinghow net operating income will change in responses to changes inunit sales?
Prepare a contribution format income statement.
Todrick Company
Contribution Format Income Statement
Sales
Variableexpenses:
Cost of goodssold
Sellingexpense
Administrativeexpense
0
Contributionmargin
Fixedexpenses:
Sellingexpense
Administrative expense
0
Net operatingincome

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Solution 1 Todrick Company Contribution format Income Statement Sales 285000 Variable Expenses Coat of goods sold 190001900009500 199500 Variable Selling Expenses 14250 Variable Administrative Expenses 22800019950014250 14250 Total See Answer

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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