Problem 1 19 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 $ 270,000 Beginning merchandise inventory $ 18,000 Purchases $ 180,000 Ending merchandise inventory $ 9,000 Fixed selling expense $ Fixed administrative expense $ 10,800 Variable selling expense $ 13,500 Variable administrative expense $ Contribution margin $ 54,000 Net operating income $ 16,200 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 responses to changes in unit sales Problem 1 24 Different Cost Classifications for Different Purposes LO1 1, LO1 2, LO1 3, LO1 4, LO1 5 Dozier Company produced and sold 1,000 units during its first month of operations It reported the following costs and expenses for the month Direct materials $ 87,000 Direct labor $ 44,000 Variable manufacturing overhead $ 22,200 Fixed manufacturing overhead 33,400 Total manufacturing overhead $ 55,600 Variable selling expense $ 15,600 Fixed selling expense 25,200 Total selling expense $ 40,800 Variable administrative expense $ 5,800 Fixed administrative expense 28,600 Total administrative expense $ 34,400 Required 1 With respect to cost classifications for preparing financial statements a What is the total product cost b What is the total period cost 2 With respect to cost classifications for assigning costs to cost objects a What is total direct manufacturing cost b What is the total indirect manufacturing cost 3 With respect to cost classifications for manufacturers a What is the total manufacturing cost b What is the total nonmanufacturing cost c What is the total conversion cost and prime cost 4 With respect to cost classifications for predicting cost behavior a What is the total variable manufacturing cost b What is the total fixed cost for the company as a whole c What is the variable cost per unit produced and sold 5 With respect to cost classifications for decision making a If Dozier had produced 1,001 units instead of 1,000 units, how much incremental manufacturing cost would it have incurred to make the additional unit

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Problem 1-19 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

Problem 1-19 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	$	270,000
Beginning merchandise inventory	$	18,000
Purchases	$	180,000
Ending merchandise inventory	$	9,000
Fixed selling expense	$	?
Fixed administrative expense	$	10,800
Variable selling expense	$	13,500
Variable administrative expense	$	?
Contribution margin	$	54,000
Net operating income	$	16,200

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 responses to changes in unit sales?

Problem 1-24 Different Cost Classifications for Different Purposes [LO1-1, LO1-2, LO1-3, LO1-4, LO1-5]

Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month:


Direct materials			$	87,000
Direct labor			$	44,000
Variable manufacturing overhead	$	22,200
Fixed manufacturing overhead		33,400
Total manufacturing overhead			$	55,600
Variable selling expense	$	15,600
Fixed selling expense		25,200
Total selling expense			$	40,800
Variable administrative expense	$	5,800
Fixed administrative expense		28,600
Total administrative expense			$	34,400

Required:

1. With respect to cost classifications for preparing financial statements:

a. What is the total product cost?

b. What is the total period cost?

2. With respect to cost classifications for assigning costs to cost objects:

a. What is total direct manufacturing cost?

b. What is the total indirect manufacturing cost?

3. With respect to cost classifications for manufacturers:

a. What is the total manufacturing cost?

b. What is the total nonmanufacturing cost?

c. What is the total conversion cost and prime cost?

4. With respect to cost classifications for predicting cost behavior:

a. What is the total variable manufacturing cost?

b. What is the total fixed cost for the company as a whole?

c. What is the variable cost per unit produced and sold?

5. With respect to cost classifications for decision making:

a. If Dozier had produced 1,001 units instead of 1,000 units, how much incremental manufacturing cost would it have incurred to make the additional unit?