Exercise 1-6 Traditional and Contribution Format Income Statements [LO1-6] Cherokee Inc. is a merchandiser that provided the following information Amount 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 12,000 16 $ 18,000 $ 14,000 $ 10,000 $ 24,000 $ 86,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Required 1 Required 2 Prepare a traditional income statement. Cherokee, Inc. Traditional Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: $192,000 Administrative expenses Selling expenses Net operating income Cherokee, Inc. Contribution Format Income Statement Sales $192,000 Variable expenses Administrative expenses Cost of goods sold Selling expenses Contribution margin Fixed expenses Selling expenses Administrative expenses Net operating income