Cherokee Inc. is a merchandiser that provided the following information: Number of units sold Selling price per unit Variable selling expense per unit Variable administrative expense per unit Total fixed selling expense Total fixed administrative expense Beginning merchandise inventory Ending merchandise inventory Merchandise purchases Amount 10,000 $ 17 $ 2 $ 3 $21,000 $14,000 $10,000 $23,000 $88,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Prepare a traditional income statement. Cherokee, Inc. Traditional Income Statement Sales s 170,000 Cost of goods sold 75,000 95,000 X $ 20,000 Gross margin Selling and administrative expenses: Variable manufacturing overhead Fixed manufacturing overhead Selling expenses Administrative expenses Net operating income 30,000 X X ISIS 21,000 14.000 85,000 $ 10,000 Required 2 > Cherokee, Inc. Contribution Format Income Statement $ 170,000 Sales Variable expenses: Purchases 88,000 42,000 Selling expenses Variable manufacturing overhead X 42,000 Contribution loss 172,000 (2,000) Fixed expenses: Selling expenses Fixed manufacturing overhead 21,000 @ 14,000 35,000 Net operating loss $ 33,000