Instructions

1. Prepare a traditional format income statement;

2. Prepare a contribution format income statement.

3. Prepare a schedule of cost of goods manufactured.

4. Prepare a schedule of cost of goods sold;

The following data from the just completed year are taken from the accounting records of Sarah Company (in dollars): Units sold 10,000 units; Selling Price $55 per unit; Variable selling expense S6 per unit; Total fixed selling expense $27,500 Variable administrative expense $4 per unit; Total fixed administrative expense $45,000; Direct labor cost $90,000; Manufacturing overhead applied to work in process $210,000; Total actual manufacturing overhead $210,000; Indirect materials $40,000 Inventories: Raw material purchases (during year) $140,000; Raw materials (beginning of year) $8,000; Raw materials (end of year) $11,000; Work in process (beginning of year) $6,000; Work in process (end of year) $18,000; Finished goods (beginning of year) $9,000; Finished goods (end of year) $15,000