Milden Company is a merchandiser that plans to sell 31,000 units during the next quarter at a selling price of $58 per unit. The company also gathered the following cost estimates for the next quarter: Cost Cost Formula Cost of good sold $28 per unit sold Advertising expense $178,000 per quarter Sales commissions 5% of sales Shipping expense $48,000 per quarter + $5.00 per unit sold Administrative salaries $88,000 per quarter Insurance expense $9,800 per quarter Depreciation expense $58,000 per quarter Required: 1. Prepare a contribution format income statement for the next quarter. 2. Prepare a traditional format income statement for the next quarter.

1. contribution format income statement for the next quarter

Sales (31,000 units × $58)                                                          $1,798,000

Less Variable Costs

Cost of good sold (31,000 units × $28)              $868,000

Sales commissions ( $1,798,000 ×  5%)               $89,900

Shipping expense ( $5.00 × 31,000 units)          $155,000      ($1,112,900)

Contribution                                                                                   $985,100

Less Fixed Costs

Advertising expense                                            $178,000

Shipping expense                                                 $48,000

Administrative salaries                                          $88,000

Insurance expense                                                  $9,800

Depreciation expense                                          $58,000        ($381,800)

Net Income / (Loss)                                                                      $303,300

2. traditional format income statement for the next quarter

Sales (31,000 units × $58)                                                          $1,798,000

Less Cost of good sold

Cost of good sold (31,000 units × $28)                                     ($868,000)

Gross Profit                                                                                   $930,000

Less Expenses

Sales commissions ( $1,798,000 ×  5%)               $89,900

Advertising expense                                            $178,000

Shipping expense                                                 $48,000

Variable Shipping expense                                 $155,000

Administrative salaries                                          $88,000

Insurance expense                                                  $9,800

Depreciation expense                                          $58,000       ($626,700)

Net Income / (Loss)                                                                      $303,300

Explanation:

The Contribution Income Statement shows the Contribution whilst the Traditional Income Statement shows the Gross Profit.

forbearance of student loan payments. under forbearance, your loan payments are postponed (or reduced) but interest continues to accrue during the period of forbearance. if you don't pay the interest during that period, the interest may be “capitalized,” which means it is added to your principal balance.