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

Sales	$	315,000
Beginning merchandise inventory	$	21,000
Purchases	$	210,000
Ending merchandise inventory	$	10,500
Fixed selling expense	$	?
Fixed administrative expense	$	12,600
Variable selling expense	$	15,750
Variable administrative expense	$	?
Contribution margin	$	63,000
Net operating income	$	18,900

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?

Todrick Company
Contribution Format Income Statement
Sales		$315,000
Variable expenses:
Cost of goods sold	$220,500
Selling expense	15,750
Administrative expense	15,750
		252,000
Contribution margin		63,000
Fixed expenses:
Selling expense	$31,500
Administrative expense	12,600
		44,100
Net operating income		$18,900

Prepare a traditional format income statement.

Todrick Company
Traditional Income Statement
Sales		$315,000
Cost of goods sold		220,500
Gross margin		94,500
Selling and administrative expenses:
Selling expense	$47,250
Administrative expense	????	47,250
Net operating income		$????

3. Calculate the selling price per unit.

4. Calculate the variable cost per unit.

5. Calculate the contribution margin per unit.

3.	Selling price per unit	$315
4.	Variable cost per unit	$??????
5.	Contribution margin per unit	$63