Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. problem 1-19 traditional and contribution format i

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

Free

60.1K

Verified Solution

Question

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 traditional format income statement.

Todrick Company
TraditionalIncome Statement
0
Sellingand administrative expenses:
0

Answer & Explanation Solved by verified expert
3.7 Ratings (358 Votes)

Contribution format income statement
Amount amount
Sales 285,000
less:Variable expenses
Cost of goods sold 199500
Variable selling expense 14,250
variable administrative expense 14,250 228,000
contribution margin 57,000
less:Fixed expense
fixed administrative expense 11,400
fixed selling expense 28,500 39,900
net operating income 17,100
Traditional income statement
sales 285,000
less cost of goods sold 199500
Gross profit 85,500
Selling and administrative expense
Selling expense 42,750
Administrative expense 25,650 68,400
Net operating income 17,100
3 Selling price per unit 285
4 Variable cost per unit 228
5 Contribution margin per unit 57
6) Contribution format

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Finance
1.2K views

7. AppCo is an early stage company whose financial plans call for the company to be...

Basic Math
1.2K views

The authors of a paper concerned about racial stereotypes in television counted the number of times...

Basic Math
1.2K views

Use Lagrange multipliers to find the maximum and minimum values of f x y x...

Statistics
1.2K views

9 nts TB MC Qu 08 54 Static At the end of the At the...

Statistics
1.2K views

preparation products on the market StudyFocus and Prepara A researcher in the Education department at...

Calculus
1.2K views

Determine the absolute extrema s if any of f x 2 3x 2 2 x...

Calculus
1.2K views

Express the number in standard notation or standard form 5 74 108 X Standard Form...

Algebra
1.2K views

Solve the quadratic inequality Give the solution set in interval notation x x 6 0...

Accounting
1.2K views

I Razor Co. sold equipment with a six-year remaining useful life...

Accounting
1.2K views

Last year, X Company sold 64,600 units of its only product for $18.00...

Accounting
1.2K views

need help with all of this question. i have the original solved but not with...

Accounting
1.2K views

(B) Doras Dresses new computerised stock control system has the following features incorporated into the...