Business, 25.09.2020 04:01, patricklap4951

Milden Company is a merchandiser that plans to sell 31,000 units during the next quarter at a selling price of $58 per unit. The company also gathered the following cost estimates for the next quarter: Cost Cost Formula Cost of good sold $28 per unit sold Advertising expense $178,000 per quarter Sales commissions 5% of sales Shipping expense $48,000 per quarter + $5.00 per unit sold Administrative salaries $88,000 per quarter Insurance expense $9,800 per quarter Depreciation expense $58,000 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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answered: halieysandberg1234

1. contribution format income statement for the next quarter

Sales (31,000 units × $58) $1,798,000

Less Variable Costs

Cost of good sold (31,000 units × $28) $868,000

Sales commissions ( $1,798,000 × 5%) $89,900

Shipping expense ( $5.00 × 31,000 units) $155,000 ($1,112,900)

Contribution $985,100

Less Fixed Costs

Advertising expense $178,000

Shipping expense $48,000

Administrative salaries $88,000

Insurance expense $9,800

Depreciation expense $58,000 ($381,800)

Net Income / (Loss) $303,300

2. traditional format income statement for the next quarter

Sales (31,000 units × $58) $1,798,000

Less Cost of good sold

Cost of good sold (31,000 units × $28) ($868,000)

Gross Profit $930,000

Less Expenses

Sales commissions ( $1,798,000 × 5%) $89,900

Advertising expense $178,000

Shipping expense $48,000

Variable Shipping expense $155,000

Administrative salaries $88,000

Insurance expense $9,800

Depreciation expense $58,000 ($626,700)

Net Income / (Loss) $303,300

Explanation:

The Contribution Income Statement shows the Contribution whilst the Traditional Income Statement shows the Gross Profit.

answered: Guest

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answered: Guest

i believe the answer would have to be a dependable person

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Milden Company is a merchandiser that plans to sell 31,000 units during the next quarter at a sellin...