Traditional income statement : Net operating income $47,000
Contribution income statement : Net operating income $25,000
1.
Traditional Income Statement
Sales (11,000 x $16) $176,000
Cost of goods sold
(9,000 + 87,000 - 25,000) ($71,000)
Gross Margin 105,000
Selling and administrative expenses:
Selling expense
(11,000 x 1) + 22,000 $33,000
Administrative expense
(11,000 x 1) + 14,000 $25000
Net operating income $47,000
2.
Contribution format income statement
Sales $176,000
Variable expenses:
Cost of goods sold 71,000
Selling expense 11,000
Administrative expense 11,000 ($93,000)
Contribution Margin $83,000
Fixed expenses:
Selling expense 33,000
Administrative expense 25,000 (58,000)
Net operating income $25,000
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