MANAGERIAL ACCT W/CONNECT >IC<
15th Edition
ISBN: 9781259405303
Author: Garrison
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 2, 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.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Please do not give solution in image format thanku
00
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 2 Solutions
MANAGERIAL ACCT W/CONNECT >IC<
Ch. 2.A - Prob. 1ECh. 2.A - Prob. 2ECh. 2.A - Prob. 3PCh. 2.A - Prob. 4PCh. 2.A - Prob. 5CCh. 2.B - Prob. 1ECh. 2.B - Prob. 2ECh. 2.B - Prob. 3PCh. 2.B - Prob. 4PCh. 2 - Prob. 1Q
Ch. 2 - Define the following: (a) direct materials, (b)...Ch. 2 - Explain the difference between a product cost and...Ch. 2 - Distinguish between (a) a variable cost, (b) a...Ch. 2 - Prob. 5QCh. 2 - Define the following terms: (a) cost behavior and...Ch. 2 - What is meant by an activity base when dealing...Ch. 2 - Managers often assume a strictly linear...Ch. 2 - Distinguish between discretionary fixed costs and...Ch. 2 - Does the concept of the relevant range apply to...Ch. 2 - What is the major disadvantage of the high-low...Ch. 2 - Prob. 12QCh. 2 - Prob. 13QCh. 2 - What is the difference between a traditional...Ch. 2 - Prob. 15QCh. 2 - Prob. 16QCh. 2 - Prob. 17QCh. 2 - Prob. 1AECh. 2 - Prob. 2AECh. 2 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 2 - Prob. 1F15Ch. 2 - L012, L013, L014, L015, L016 Martinez Company’s...Ch. 2 - L01–1, L01–2, L01–3, L01–4, L01–5, L01–6
Martinez...Ch. 2 - L01–1, L01–2, L01–3, L01–4, L01–5, L01–6
Martinez...Ch. 2 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 2 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 2 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 2 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 2 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 2 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 2 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 2 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 2 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 2 - L01-1, L01-2, L01-3, L01-4, L01-5, L01-6
Martinez...Ch. 2 - L01-2, L01-3, L01-4, L01-5, L01-6 Martinez...Ch. 2 - EXERCISE 1—1 Identifying Direct and Indirect Costs...Ch. 2 - EXERCISE 1-2 Classifying Manufacturing Costs LO1-2...Ch. 2 - EXERCISE 1-3 Classifying Costs as Product or...Ch. 2 - EXERCISE 14 Fixed and Variable Cost Behavior LO14...Ch. 2 - Prob. 5ECh. 2 - EXERCISE 1—6 Traditional and Contribution Format...Ch. 2 - Prob. 7ECh. 2 - Prob. 8ECh. 2 - Prob. 9ECh. 2 - Prob. 10ECh. 2 - Prob. 11ECh. 2 - EXERCISE 1-12 Product and Period Cost Flows LO1–3...Ch. 2 - Prob. 13ECh. 2 - EXERCISE 2-14 High-Low Method: Predicting Cost...Ch. 2 - Prob. 15ECh. 2 - Prob. 16PCh. 2 - Prob. 17PCh. 2 - PROBLEM 1-18 Direct and Indirect Costs; variable...Ch. 2 - Prob. 19PCh. 2 - PROBLEM 2-20 High-Low Method; Predicting Cost...Ch. 2 - PROBLEM 2-21 Cost Classification [L02-1, L02-3,...Ch. 2 - Prob. 22PCh. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26CCh. 2 - Prob. 27C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 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
- Exercise 1-6 (Algo) Traditional and Contribution Format Income Statements [LO1-6] Cherokee Incorporated is a merchandiser that provided the following information: Number of units sold Selling price per unit Variable selling expense per unit Variable administrative expense per unit Total fixed selling expense Total fixed administrative expense Beginning merchandise inventory Ending merchandise inventory Merchandise purchases Amount 12,000 $ 16 $2 $3 $ 20,000 $ 14,000 $ 10,000 $ 23,000 $ 87,000arrow_forwardPlease do not give solution in image format thankuarrow_forwardHararrow_forward
- Number of units sold Selling price per unit Variable selling expense per unit Variable administrative expense per unit Total fixed selling expense Total fixed administrative expense Beginning merchandise inventory Ending merchandise inventory Merchandise purchases Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Amount 13,000 $ 15 $ 2 $ 3 $ 21,000 $ 15,000 $ 11,000 $ 23,000 $ 89,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a traditional income statement. Cherokee, Incorporated Traditional Income Statement Selling and administrative expenses: 0 < Prev 2 *****STARarrow_forward8arrow_forwardplease avoid answers image basedarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
IAS 29 Financial Reporting in Hyperinflationary Economies: Summary 2021; Author: Silvia of CPDbox;https://www.youtube.com/watch?v=55luVuTYLY8;License: Standard Youtube License