Cherokee Incorporated is a merchandiser that provided the following information:

AmountNumber of units sold12,000Selling price per unit$ 18Variable selling expense per unit$ 2Variable administrative expense per unit$ 3Total fixed selling expense$ 20,000Total fixed administrative expense$ 15,000Beginning merchandise inventory$ 10,000Ending merchandise inventory$ 25,000Merchandise purchases$ 86,000

Required:

1. Prepare a traditional income statement.

2. Prepare a contribution format income statement.