Sales

Beginning merchandise inventory Purchases

Ending merchandise inventory

Fixed selling expense

Fixed administrative expense

Variable selling expense

Variable administrative expense

Contribution margin

Net operating income

$$300,000$

$$20,000$

$$200,000$

$$7,000$

$$12,000$

$$15,000$

$$60,000$

$$18,000$

Required:

Prepare a contribution format income statement.

Prepare a traditional format income statement.

Calculate the selling price per unit.

Calculate the variable cost per unit.

Calculate the contribution margin per unit.

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?

Complete this question by entering your answers in the tabs below.

Required $2$

Required $3$ to

$5$

Required $6$

Prepare a traditional format income statement.