Whitman Company has just completed its first year of operations. The company's traditional format income statement...

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Whitman Company has just completed its first year of operations. The company's traditional format income statement for the year follows: Whitman Company Income Statement Sales (33,000 units $25 per unit) Cost of goods sold (33,000 units $17 per unit) Gross margin Selling and administrative expenses Net operating income Amount $ 825,000 561,000 264,000 188,000 $ 76,000 The company's selling and administrative expenses consist of $89,000 per year in fixed expenses and $3 per unit sold in variable expenses. The $17 unit product cost given above is computed as follows: Direct materials Direct labor Variable overhead Fixed overhead ($138,000 46,000 units) Unit product cost (under traditional costing) $ 6 6 2 3 $ 17 Required: 1a Prepare a contribution format income statement for the year ended December 31. 1b What was the contribution toward fixed expenses and profits for each unit sold? (State this figure in a single dollar amount per snowboard.) 1c What would operating income be if only 24,000 units were sold in a quarter? You can assume no change to fixed expenses will occur if sales decline to 16,500 units. (Hint. You don't need to prepare a new income statement to determine the answer.) Whitman Company has just completed its first year of operations. The company's traditional format income statement for the year follows: Whitman Company Income Statement Sales (33,000 units $25 per unit) Cost of goods sold (33,000 units $17 per unit) Gross margin Selling and administrative expenses Net operating income Amount $ 825,000 561,000 264,000 188,000 $ 76,000 The company's selling and administrative expenses consist of $89,000 per year in fixed expenses and $3 per unit sold in variable expenses. The $17 unit product cost given above is computed as follows: Direct materials Direct labor Variable overhead Fixed overhead ($138,000 46,000 units) Unit product cost (under traditional costing) $ 6 6 2 3 $ 17 Required: 1a Prepare a contribution format income statement for the year ended December 31. 1b What was the contribution toward fixed expenses and profits for each unit sold? (State this figure in a single dollar amount per snowboard.) 1c What would operating income be if only 24,000 units were sold in a quarter? You can assume no change to fixed expenses will occur if sales decline to 16,500 units. (Hint. You don't need to prepare a new income statement to determine the answer.)

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Lets address each requirement step by step 1a Prepare a contribution format income statement for the year ended December 31 In a contribution format i... View the full answer