Cherokee Inc. is a merchandiser that provided the following information:

Number of units sold

12,000Selling price per unit$15

Variable selling expense per unit$2

Variable administrative expense per unit$1

Total fixed selling expense$20,000

Total fixed administrative expense$14,000

Beginning merchandise inventory$9,000

Ending merchandise inventory$22,000

Merchandise purchases$88,000

Required:

1. Prepare a traditional income statement.

2. Prepare a contribution format income statement.