Frankel Company

Traditional Income Statement

For the 3 months ending September 30, 2020

1. Use the high low method to determine the cost equation for each item on the income statement.

2. Using the cost equations, create the contribution income statement for 5,000 units.

3. Using the cost equations, create the contribution income statement for 4,800 units.

B C D E 1 Frankel Company 2 Traditional Income Statement 3 For the 3 months ending September 30, 2020 4 5 6 Sales in units July 4,000 August 4,500 September 5,000 7 8 Sales $ 400,000 $ 450,000 $ 500,000 9 Cost of goods sold 240.000 270,000 300,000 10 Gross Margin 160,000 180,000 200,000 11 Selling & Administrative Expenses: 12 Advertising 21,000 21,000 21,000 13 Shipping 34,000 36,000 38,000 14 Salaries and commissions 78,000 84,000 90,000 15 Insurance 6,000 6,000 6,000 16 Depreciation 15.000 15.000 15.000 17 Total Selling & Administrative Expenses 154.000 162,000 170,000 18 19 Net Operating Income $ 6,000 18,000 $ 30.000 20 21 22 Required: 23 1. Use the high low method to determine the cost equation for each item on the income statement. 24 2. Using the cost equations, create the contribution income statement for 5,000 units. 25 3. Using the cost equations, create the contribution income statement for 4,800 units. 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Sheet1 Ready