In Class Exercise: Page 12 of 12 - ZOOM Convert tradition income statement to contribution margin income statement Traditional (by function) Contribution margin (by cost Per behavior) unit Ratio Sales (10,000 units) 100,000 Sales (10,000 units) 100,000 10.00 1.0 Variable Cost of goods sold 20,000 Variable Costs Fixed cost of goods 10,000 sold V CGS Total Cost of Goods 30,000 V sell Sold Gross profit 70,000 V admin Total variable costs Selling administrative: and Contribution Margin Variable selling costs 5,000 Fixed selling costs 7,000 Fixed expenses Variable administrative 8,000 Fixed CGS costs Fixed administrative 12,000 Fixed sell costs Total selling and admin 32,000 expenses Fixed admin Total Fixed Exp Net Income 38,000 Net Income Page 10 of 12 - ZOOM In Class Practice Example: Contribution Margin Income Statement Information: Whittier Company plans to sell 1,000 mowers at $400 each in the coming year. Product costs include: Direct materials per mower Direct labor per mower Variable factory overhead per mower Total fixed factory overhead $ 180 100 25 15,000 Variable selling expense is a commission of $20 per mower; fixed selling and administrative expense totals $30,000. Required 1. Calculate the total variable expense per unit. 2. Calculate the total fixed expense for the year. 3. Prepare a contribution margin income statement for Whittier for the coming year.