1. Prepare a contribution format income statement for the next quarter. 2. Prepare a traditional format income statement for the next quarter.
1. Prepare a contribution format income statement for the next quarter. 2. Prepare a traditional format income statement for the next quarter.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Milden Company is a merchandiser that plans to sell 35,000 units during the next quarter at a selling price of $60 per unit. The company also gathered the following cost estimates for the next quarter:
| Cost | Cost Formula |
| Cost of good sold | $30 per unit sold |
| Advertising expense | $180,000 per quarter |
| Sales commissions | 5% of sales |
| Shipping expense | $40,000 per quarter + $5.00 per unit sold |
| Administrative salaries | $90,000 per quarter |
| Insurance expense | $10,000 per quarter |
| $60,000 per quarter | |
Required:
1. Prepare a contribution format income statement for the next quarter.
2. Prepare a traditional format income statement for the next quarter.
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