Problem 1-19 (Algo) Traditional and Contribution Format Income Statements [LO1-6]

Todrick Company is a merchandiser that reported the following information based on 1,000 units sold:

Sales	$ 420,000
Beginning merchandise inventory	$ 28,000
Purchases	$ 280,000
Ending merchandise inventory	$ 14,000
Fixed selling expense	?question mark
Fixed administrative expense	$ 16,800
Variable selling expense	$ 21,000
Variable administrative expense	?question mark
Contribution margin	$ 84,000
Net operating income	$ 25,200

Required:

1. Prepare a contribution format income statement.
2. Prepare a traditional format income statement.
3. Calculate the selling price per unit.
4. Calculate the variable cost per unit.
5. Calculate the contribution margin per unit.
6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how net operating income will change in response to changes in unit sales?

Prepare a contribution format income statement. Prepare a traditional format income statement. 3. Calculate the selling price per unit. 4. Calculate the variable cost per unit. 5. Calculate the contribution margin per unit. Complete this question by entering your answers in the tabs below. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how net operating income will change in response to changes in unit sales