Check your worksheet by changing the variable selling cost in the Data area to $900, keeping all of the other data the same as in Exhibit 1-7. If your worksheet is operating properly, the net operating income under the traditional format income statement and under the contribution format income statement should now be $700 and the contribution margin should now be $4,700. If you do not get these answers, find the errors in your worksheet and correct them.

A B D 1 Chapter 1: Applying Excel 2 3 Data 4 Sales $12,000 5 Variable costs: 6 Cost of goods sold $6,000 7 Variable selling $600 8 Variable administrative $400 9 Fixed costs: 10 Fixed selling $2,500 11 Fixed administrative $1,500 12 13 Enter a formula into each of the cells marked with a ? below 14 Exhibit 1-7 15 16 Traditional Format Income Statement 17 Sales $ 12,000 18 Cost of goods sold 6,000 19 Gross margin 6,000 20 Selling and administrative expenses: 21 Selling ? 22 Administrative ? ? 23 Net operating income ? 24 25 Contribution Format Income Statement 26 Sales $ 12,000 27 Variable expenses: 28 Cost of goods sold $ 6,000 29 Variable selling 600 30 Variable administration 400 31 Contribution margin ? 32 Fixed expenses: 33 Fixed selling 2,500 34 Fixed administrative 1,500 ? 35 Net operating income ? 36 37 38 39