Milden Company is a merchandiser that plans to sell 12,000 units during the next quarter at a selling price of $100 per unit. The company also gathered the following cost estimates for the next quarter: Cost Cost Formula Cost of good sold $35 per unit sold Advertising expense $210,000 per quarter 6% of sales Sales commissions Shipping expense Administrative salaries $28,000 per quarter + $9.10 per unit sold $145,000 per quarter $9,000 per quarter Insurance expense Depreciation expense $76,000 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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Milden Company is a merchandiser that plans to sell 12,000 units during the next quarter
at a selling price of $100 per unit. The company also gathered the following cost estimates
for the next quarter:
Cost
Cost Formula
Cost of good sold
$35 per unit sold
Advertising expense
$210,000 per quarter
6% of sales
Sales commissions
Shipping expense
Administrative salaries
$28,000 per quarter + $9.10 per unit sold
$145,000 per quarter
Insurance expense
$9,000 per quarter
Depreciation expense
$76,000 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.
Transcribed Image Text:Milden Company is a merchandiser that plans to sell 12,000 units during the next quarter at a selling price of $100 per unit. The company also gathered the following cost estimates for the next quarter: Cost Cost Formula Cost of good sold $35 per unit sold Advertising expense $210,000 per quarter 6% of sales Sales commissions Shipping expense Administrative salaries $28,000 per quarter + $9.10 per unit sold $145,000 per quarter Insurance expense $9,000 per quarter Depreciation expense $76,000 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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