MANAGERIAL ACCT(LL)+CONNECT+PROCTORIO PL
17th Edition
ISBN: 9781265574826
Author: Garrison
Publisher: MCG
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Textbook Question
Chapter 1, Problem 6E
EXERCISE 1—6 Traditional and Contribution Format Income Statements LO1—6
Cherokee Inc. is a merchandiser that provided the following information:
| Amount | |
| Number of units sold | 20,000 |
| Selling price per unit | $30 |
| Variable selling expense per unit | $4 |
| Variable administrative expense per unit | $2 |
| Total fixed selling expense | $40,000 |
| Total fixed administrative expense | $30,000 |
| Beginning merchandise inventory | $24,000 |
| Ending merchandise inventory | $44,000 |
| Merchandise purchases | $180,000 |
Required:
- Prepare a traditional income statement.
- Prepare a contribution format income statement.
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Chapter 1
PROBLEM 1-19 Traditional and Contribution Format Income Statements L01-6
Todrick Company is a merchandiser that reported the following information based on 1,000 units sold:
Sales.....
Beginning merchandise inventory.
Purchases.....
1.
2.
3.
4.
5.
6.
Ending merchandise inventory
Fixed selling expense......
Fixed administrative expense.
Variable selling expense.
Variable administrative expense
Contribution margin.
Net operating income
$300,000
$20,000
$200,000
$7,000
?
$12,000
$15,000
?
$60,000
$18,000
Required:
Prepare a contribution format income statement.
Prepare a traditional format income statement.
Calculate the selling price per unit.
Calculate the variable cost per unit.
Calculate the contribution margin per unit.
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? Why?
None
Chapter 1 Solutions
MANAGERIAL ACCT(LL)+CONNECT+PROCTORIO PL
Ch. 1 - Prob. 1QCh. 1 - Define the following: (a) direct materials, (b)...Ch. 1 - Explain the difference between a product cost and...Ch. 1 - Distinguish between (a) a variable cost, (b) a...Ch. 1 - Prob. 5QCh. 1 - Define the following terms: (a) cost behavior and...Ch. 1 - What is meant by an activity base when dealing...Ch. 1 - Prob. 8QCh. 1 - Distinguish between discretionary fixed costs and...Ch. 1 - Does the concept of the relevant range apply to...
Ch. 1 - What is the difference between a traditional...Ch. 1 - Prob. 12QCh. 1 - Prob. 13QCh. 1 - Prob. 14QCh. 1 - Prob. 1AECh. 1 - Prob. 2AECh. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - L012, L013, L014, L015, L016 Martinez Company’s...Ch. 1 - L01–1, L01–2, L01–3, L01–4, L01–5, L01–6
Martinez...Ch. 1 - L01–1, L01–2, L01–3, L01–4, L01–5, L01–6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 1 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 1 - EXERCISE 1—1 Identifying Direct and Indirect Costs...Ch. 1 - EXERCISE 1-2 Classifying Manufacturing Costs LO1-2...Ch. 1 - EXERCISE 1-3 Classifying Costs as Product or...Ch. 1 - EXERCISE 14 Fixed and Variable Cost Behavior LO14...Ch. 1 - Prob. 5ECh. 1 - EXERCISE 1—6 Traditional and Contribution Format...Ch. 1 - Prob. 7ECh. 1 - EXERCISE 18 Product Costs and Period Costs;...Ch. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - EXERCISE 1—11 Cost Behavior; Contribution Format...Ch. 1 - EXERCISE 1-12 Product and Period Cost Flows LO1–3...Ch. 1 - Prob. 13ECh. 1 - EXERCISE 1-14 Cost Classification 1O1–2, LO1–3,...Ch. 1 - Prob. 15ECh. 1 - EXERCISE 1–16 Cost Classifications for Decision...Ch. 1 - EXERCISE 1-17 Classifying Variable and Fixed Costs...Ch. 1 - PROBLEM 1-18 Direct and Indirect Costs; variable...Ch. 1 - PROBLEM 1-19 Traditional and Contribution Format...Ch. 1 - PROBLEM 120 Variable and Fixed Costs; Subtleties...Ch. 1 - Prob. 21PCh. 1 - Prob. 22PCh. 1 - PROBLEM 123 Cost Classification LO11, LO13, LO14...Ch. 1 - PROBLEM 1-24 Different Cost Classifications for...Ch. 1 - Prob. 25PCh. 1 - CASE 1-26 Cost Classification and Cost Behavior...Ch. 1 - Prob. 27C
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- rm.3arrow_forward0.7 6 Exercise 1-6 (Algo) Traditional and Contribution Format Income Statements [LO1-6] Cherokee Incorporated is a merchandiser that provided the following information: Variable selling expense per unit Variable administrative expense per unit points Skipped Number of units sold Selling price per unit eBook Total fixed selling expense Total fixed administrative expense Hint Ending merchandise inventory Print References Beginning merchandise inventory Merchandise purchases Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Amount 10,000 $ 17 $ 1 $ 3 $ 21,000 $ 14,000 $ 8,000 $ 24,000 $ 88,000 Mc Graw Hill Complete this question by entering your answers in the tabs below. Required 1 Required 2 < Prev 9 10 9 Next Check my workarrow_forwardRequired Information Problem 6-1A Perpetual: Alternative cost flows LO P1 [The following information applies to the questions displayed below] Warnerwoods Company uses a perpetual Inventory system. It entered into the following purchases and sales transactions for March. Date Activities Mar. 1 Beginning inventory Mar. 5 Purchase Mar 9 Sales Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales Totals Problem 6-1A Part 4 Gross Margin Sales Less: Cost of goods sold Gross profit Units Acquired at Cost 200 units@ $53.00 per unit 275 units@ $58.00 per unit FIFO 135 units@ $63.00 per unit 250 units@ $65.00 per unit 860 units 4. Compute gross profit earned by the company for each of the four costing methods. For specific Identification, the March 9 sale consisted of 115 units from beginning Inventory and 245 units from the March 5 purchase: the March 29 sale consisted of 95 units from the March 18 purchase and 135 units from the March 25 purchase. (Round weighted average cost per unit to two…arrow_forward
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