Problem 1-19 Traditional and Contribution Format Income Statements (L01-6] Todrick Company is a merchandiser that reported the following information based on 1,000 units sold:
2:05
d
Sales
Beginning merchandise inventory
Purchases
Ending merchandise inventory
Fixed selling expense
Fixed administrative expense
Variable selling expense
Variable administrative expense
Contribution margin
Net operating income
$ 240,000
$ 16,000
$ 160,000
8,000
$
2
$ 9,600
12,000
$
?
$ 48,000
14,400
*
ces
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 responses to changes in unit sales?
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