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?

Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: $ 240,000 $ 16,000 $ 160,000 8,000 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 $ $ $ $ $ $ 9,600 12,000 ? 48,000 14,400 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? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3 to 5 Req 6 Prepare a contribution format income statement. $ 240,000 Todrick Company Contribution Format Income Statement Sales Variable expenses: Cost of goods sold Variable manufacturing overhead Administrative expense 0 Fixed expenses: 0 Prepare a traditional format income statement. Todrick Company Traditional Income Statement 0 Selling and administrative expenses: 0 Req 1 Req 2 Req 3 to 5 Req 6 3. Calculate the selling price per unit. 4. Calculate the variable cost per unit. 5. Calculate the contribution margin per unit. 3. Selling price per unit 4. Variable cost per unit 5. Contribution margin per unit Req 2 Req 6 Req 1 Req 2 Req 3 to 5 Req 6 Which income statement format (traditional format or contribution format) would be more usef how net operating income will change in responses to changes in unit sales? Traditional income statement Contribution income statement