Milden Company is a merchandiser that plans to sell 37,000 units during the next quarter at a selling price of $61 per unit. The company also gathered the following cost estimates for the next quarter: Cost Cost Formula Cost of good sold Advertising expense Sales commissions $31 per unit sold $181,000 per quarter 6% of sales Shipping expense Administrative salaries $63,000 per quarter + $4.00 per unit sold $91,000 per quarter $10,100 per quarter $61,000 per quarter Insurance expense 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.

Milden Company is a merchandiser that plans to sell 37,000 units during the next quarter at a selling price of $61 per unit. The company also gathered the following cost estimates for the next quarter: Cost Cost Formula Cost of good sold Advertising expense Sales commissions $31 per unit sold $181,000 per quarter 6% of sales Shipping expense Administrative salaries $63,000 per quarter + $4.00 per unit sold $91,000 per quarter $10,100 per quarter $61,000 per quarter Insurance expense 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Please complete both portions.
CS&N Enterprises expects to sell 50,000 units in January and produce 55,000 units. The selling price per unit is $40. All sales are on credit. Customer amounts on account are collected 70% in the month of sale and 25% in the month following and 5% are never collected. Estimated Variable S&A are expected to be $3 per unit sold plus bad debt. Fixed S&A are estimated to be $30,000 of which $4,000 of the $30,000 is depreciation. What is the total budgeted selling and administrative expense?
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