Milden Company is a merchandiser that plans to sell 37,000 units during the next

Question

Milden Company is a merchandiser that plans to sell 37,000 units during the next quarter at a selling price of $55 per unit. The company also gathered the following cost estimates for the next quarter $27 per unit sold $184,000 per quarter Cost of good sold aing Sales commissions Shipping expense Administrative salaries $24,000 per $94,000 per quarter $10,400 per quarter $64,000 per quarter Depreciation expense Required: 1. Prepare a contribution format income statement for the next quarter 2. Prepare a traditional format income statement for the next quarter Complete this question by entering your answers in the tabs below. Required 1 Required 2 MacBook Pro

Explanation / Answer

CONTRIBUTION FORMAT INCOME STATEMENT: Sales revenue (37000 units @55) 2035000 Less: variable cost: Cost of goods sold (37000 units @27) 999000 Sales commision (5% of sales) 101750 Shipping expense (37000 units @5) 185000 Total Variable cost 1285750 Contribution margin 749250 Less: Fixed cost Aadvertisement expense 184000 Shipping expense    24000 Admin salaries 94000 Insurancce expense 10400 Depreciation expense 64000 Total fixed cost 376400 Net Income 372850 TRADITIONAL INCOME STATEMENT Sales revenue 2035000 Less: Cst of Goods sold (37000*27) 999000 Gross Margin 1036000 Selling and admin expense Sales commission 101750 Shipping expense (185000+24000) 209000 Aadvertisement expense 184000 Admin salaries 94000 Insurancce expense 10400 Depreciation expense 64000 Total Selling and admin expense 663150 Net Income 372850

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