Traditional Format Sales Cost of goods sold $12,000 Selling and administrative expenses: Selling Administrative Net operating income $3,100 1,900 Contribution Format $12,000 Sales 6,000 Variable expenses 6,000 Cost of goods sold $6,000 Variable selling 600 Variable administrative 400 5,000 Contribution margin $ 1,000 Fixed expenses: Fixed selling 2,500 Fixed administrative 1,500 Net operating income 7,000 5,000 4,000 $ 1000 For a manufacturing company, the cost of goods sold would include some variable costs, such as direct materials, direct labor, and variable overhead, and some fixed costs, such as foed manufacturing overhead. Income statement formats for manufacturing companies will be explored in greater detail in a subsequent chapter Cost of goods sold Beginning Ending - merchandise + Purchases - merchandise inventory inventory Beginning Cost of goods Ending - merchandise + Purchases - merchandise sold inventory inventory $7,000 + $3,000 - $4,000 $6,000 Required Information Chapter 1: Applying Excel The Chapter 1 Form worksheet is to be used to create your own worksheet version of Exhibit 2 in the text Chapter 1: Applying Excel: Exercise (Part 2 of 2) 1. Now change all of the dollar amounts in the data area of your worksheet so that it looks like this: 28:10 1 Chapter 1: Applying Excel $ 42.000 3 4 5 6 7 8 9 10 11 Data Sales Variable costs: Cost of goods sold Variable selling Variable administrative Fixed costs: Fbced selling Fixed administrative $ $ $ 21.000 2,100 1.900 2,500 1.500 $ If your formulas are correct, you should get the correct answers to the following questions of 20 17 !!! Next > Cheche Required information 2. Suppose that sales are 7% higher as shown below: 1 Chapter 1: Applying Excel $ 44,9401 4 5 6 7 8 9 10 11 Data Sales Variable costs: Cost of goods sold Variable selling Variable administrative Fixed costs: Fixed selling Fixed administrative $ $ $ 22.470 2.247 2,033 $ $ 2,500 1,500 rences Enter this new data into your worksheet. Make sure you enter all of the new data not just the sales (a) What is the gross margin now? Gross margin information (b) What is the net operating income now? Net operating Income (c) What is the contribution margin now? Contribution margin (d) When sales increase by 7%, which of the following should also increase by 735 in a merchandising company row may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Variable cost 7 Fixed cost Gross margin 17 of 20 !!! Next >