Milden Company is a merchandiser that plans to sell 29,000 units during the next quarter at a selling price of $57 per unit. The company also gathered the following cost estimates for the next quarter: Cost Cost of good sold Advertising expense Sales commissions Shipping expense Administrative salaries Insurance expense Depreciation expense Cost Formula $ 27 per unit sold. $ 177,000 per quarter 6% of sales $ 75,000 per quarter + $4.00 per unit sold $ 87,000 per quarter $ 9,700 per quarter $ 57,000 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.
Milden Company is a merchandiser that plans to sell 29,000 units during the next quarter at a selling price of $57 per unit. The company also gathered the following cost estimates for the next quarter: Cost Cost of good sold Advertising expense Sales commissions Shipping expense Administrative salaries Insurance expense Depreciation expense Cost Formula $ 27 per unit sold. $ 177,000 per quarter 6% of sales $ 75,000 per quarter + $4.00 per unit sold $ 87,000 per quarter $ 9,700 per quarter $ 57,000 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Milden Company is a merchandiser that plans to sell 29,000 units during the next quarter at a selling price of $57 per unit. The
company also gathered the following cost estimates for the next quarter:
Cost
Cost of good sold
Advertising expense
Sales commissions
Shipping expense
Administrative salaries
Insurance expense
Depreciation expense
Cost Formula
$ 27 per unit sold
$ 177,000 per quarter
6% of sales
$ 75,000 per quarter + $4.00 per unit sold
$ 87,000 per quarter
$ 9,700 per quarter
$ 57,000 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.
Transcribed Image Text:Required 1 Required 2
Prepare a contribution format income statement for the next quarter.
Variable expenses:
Milden Company
Contribution Format Income Statement
For the Next Quarter
Total variable expenses
Contribution margin
Fixed expenses:
Total fixed expenses
Required 1 Required 2
Selling and administrative expenses:
< Required 1
Total selling and administrative expenses
0
Prepare a traditional format income statement for the next quarter.
Milden Company
Traditional Format Income Statement
For the Next Quarter
< Required 1
0
Required 2 >
0
Required 2 >
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