Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: Sales...

 

Transcribed Image Text:

Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: Sales Beginning merchandise inventory Purchases Ending merchandise inventory $ 360,000 $ 24,000 $ 240,000 $ 12,000 ? $ 14,400 Fixed selling expense Fixed administrative expense Variable selling expense $ 18,000 Variable administrative expense Contribution margin $ 72,000 Net operating income $ 21,600 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 operating income will change in response to changes in unit sales? Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: Sales Beginning merchandise inventory Purchases Ending merchandise inventory $ 360,000 $ 24,000 $ 240,000 $ 12,000 ? $ 14,400 Fixed selling expense Fixed administrative expense Variable selling expense $ 18,000 Variable administrative expense Contribution margin $ 72,000 Net operating income $ 21,600 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 operating income will change in response to changes in unit sales?