Exercise 2-13

Restate the following income statement for a retailer in contribution format.

Sales revenue ($100 per unit) $ 50,000 Less cost of goods sold ($56 per unit) 28,000 Gross margin 22,000 Less operating costs: Commissions ($5 per unit) $ 2,500 Salaries expense 7,800 Advertising expense 5,800 Shipping expense ($1 per unit) 500 16,600 Operating income$5,400