Download the Applying Excel form and enter formulas in all cells that contain question markS. For example, in cell C18 enter the formulaB6". After entering formulas in all of the cells that contained question marks, verify that the dollar amounts in both the traditional and contribution format income statements match the numbers in Exhibit 1-7 Check your worksheet by changing the variable selling cost in the Data area to $900, keeping all of the other data the same as in Exhibit 1-7. If your worksheet is operating properly, the net operating income under the traditional format income statement and under the contribution format income statement should now be $700 and the contribution margin should now be $4,700. If you do not get these answers, find the errors in your worksheet and correct them Traditional Format Contribution Format Sales Cost of goods sold Gross margin Selling and administrative expenses $12,000 Sales $12,000 6,000 Variable expenses $6,000 600 400 6,000 Cost of goods sold Variable selling Variable administrative Selling Administrative $3,100 1,900 7,000 5,000 5,000 Contribution margin 1000 Fixed expenses: Net operating income Fixed selling Fixed administrative 2,500 1.500 4,000 1,000 Net operating income For a manufacturing company, the cost of goods sold would include some variable costs, such as direct materials, direct labor, and variable overhead, and some fixed costs, such as fixed manufacturing overhead. Income statement formats for manufacturing companies will be explored in greater detail in a subsequent chapter Beginning merchandise +Purchases merchandise inventory Ending Cost of goods sold inventory Beginning Ending Cost of goods = merchandise + Purchases-merchandise inventory $7,000 $3,000 inventory $4,000 = $6,000 Chapter 1:Applying Exce Data Sales Variable costs $12,000 $6,000 $600 $400 Cost of goods sold Variable selling Variable administrative Fixed costs: $2,500 $1,500 Fixed selling Fixed administrative Enter a formula into each of the cells marked with a? below Exhibit 1-7 Traditional Format Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling Administrative Net operating income Contribution Format Income Statement Sales Variable expenses: Cost of goods sold Variable selling Variable administration Contribution margin Fixed expenses: Fixed selling Fixed administrative Net operating income