Exercise 1-6 (Algo) Traditional and Contribution Format Income Statements [LO Cherokee Incorporated 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 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Amount 12,000 $ 15 $ 2 $ 2 $ 19,000 $ 14,000 $ 11,000 $ 26,000 $ 85,000 Cherokee, Incorporated Sales Cost of goods sold Gross margin Traditional Income Statement $ 180,000 (70,000) 110,000 Selling and administrative expenses: Administrative expenses $ (95,000) (95,000) Cherokee, Incorporated Contribution Format Income Statement Sales Variable expenses: Cost of goods sold Fixed expenses: $ (70,000) $ 180,000 (70,000) 0