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Milden Company is a merchandiser that plans to sell 27,000 units during the next quarter at a selling price of $56 per unit. The company
Milden Company is a merchandiser that plans to sell 27,000 units during the next quarter at a selling price of $56 per unit. The company also gathered the following cost estimates for the next quarter:
Cost | Cost Formula | ||
Cost of good sold | $26 per unit sold | ||
Advertising expense | $176,000 per quarter | ||
Sales commissions | 5% of sales | ||
Shipping expense | $34,000 per quarter + $6.00 per unit sold | ||
Administrative salaries | $86,000 per quarter | ||
Insurance expense | $9,600 per quarter | ||
Depreciation expense | $56,000 per quarter | ||
Required:
1. Prepare a contribution format income statement for the next quarter.
2. Prepare a traditional format income statement for the next quarter.
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