Question - Traditional and Contribution Format Income Statements
Cherokee Inc. is a merchandiser that provided the following information:
Number of units sold - 11,000
Selling price per unit - $16
Variable selling expense per unit - $2
Variable administrative expense per unit - $2
Total fixed selling expense - $19,000
Total fixed administrative expense - $15,000
Beginning merchandise inventory - $9,000
Ending merchandise inventory - $22,000
Merchandise purchases - $90,000
1. Prepare a traditional income statement.
2. Prepare a contribution format income statement.