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 20,000 30 4 $ 2 $ 40,000 $ 30,000 $ 24,000 $ 44,000 $ 180,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Cherokee, Inc. Traditional Income Statement Sales $ 600,000 160,000 440,000 Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses $ 120,000 7,000 Administrative expenses 120,000 70,000 317,000 Net operating income $ 250,000