Milden Company is a merchandiser that plans to sell 12,000 units during the next quarter at a selling price of $100 per unit. The company also gathered the following cost estimates for the next quarter:
Cost ____________________________________________ Cost Formula
Cost of good sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35 per unit sold
Advertising expense . . . . . . . . . . . . . . . . . . . . . . . . . . . $210,000 per quarter
Sales commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6% of sales
Shipping expense . . . . . . . . . . . . . $28,000 per quarter + $9.10 per unit sold
Administrative salaries . . . . . . . . . . . . . . . . . . . . . . . . $145,000 per quarter
Insurance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,000 per quarter
Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . $76,000 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.