Required:1. Prepare a contribution format income statement.2. Prepare a traditional format income statement.3. Calculate the selling price per unit.4. Calculate the variable cost per unit.5. Calculate the contribution margin per unit.6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how net operating income will change in responses to changes in unit sales? Todrick Company is a merchandiser that reported the following information based on 1,000 units sold:Sales.Beginning merchandise inventoryPurchasesEnding merchandise inventoryFixed selling expenseFixed administrative expenseVariable selling expenseVariable administrative expenseContribution marginNet operating incomeRequired:1. Prepare a contribution format income statement.2. Prepare a traditional format income statement.3. Calculate the selling price per unit.4. Calculate the variable cost per unit.Req 1$ 240,000$ 16,000$ 160,000$8,000?$5. Calculate the contribution margin per unit.6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how netoperating income will change in responses to changes in unit sales?$$$$$Complete this question by entering your answers in the tabs below.Req 2Variable expenses:Fixed expenses:Req 3 to 59,60012,000?48,00014,400Prepare a contribution format income statement.Req 6Todrick CompanyContribution Format Income Statement< Req 100Req 2 >

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Answered: Required: 1. Prepare a contribution…

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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Required:

1. Prepare a contribution format income statement.

2. Prepare a traditional format income statement.

3. Calculate the selling price per unit.

4. Calculate the variable cost per unit.

5. Calculate the contribution margin per unit.

6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how net operating income will change in responses to changes in unit sales?

Todrick Company is a merchandiser that reported the following information based on 1,000 units sold:
Sales.
Beginning merchandise inventory
Purchases
Ending merchandise inventory
Fixed selling expense
Fixed administrative expense
Variable selling expense
Variable administrative expense
Contribution margin
Net operating income
Required:
1. Prepare a contribution format income statement.
2. Prepare a traditional format income statement.
3. Calculate the selling price per unit.
4. Calculate the variable cost per unit.
Req 1
$ 240,000
$ 16,000
$ 160,000
$
8,000
?
$
5. Calculate the contribution margin per unit.
6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how net
operating income will change in responses to changes in unit sales?
$
$
$
$
$
Complete this question by entering your answers in the tabs below.
Req 2
Variable expenses:
Fixed expenses:
Req 3 to 5
9,600
12,000
?
48,000
14,400
Prepare a contribution format income statement.
Req 6
Todrick Company
Contribution Format Income Statement
< Req 1
0
0
Req 2 >

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