Answer:
Results are below.
Explanation:
<u>First, we need to calculate the cost of goods sold:</u>
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= 11,000 + 85,000 - 23,000= $73,000
T<u>raditional format Income Statement:</u>
Sales= 14,000*16= 224,000
COGS= (73,000)
Gross profit= 151,000
Total selling expense= (2*14,000 + 18,000)= (46,000)
Total administrative expense= (2*14,000 + 16,000)= (44,000)
net operating income= 61,000
<u>Contribution format income statement:</u>
Sales= 14,000*16= 224,000
Total variable cost= (73,000 + 2*14,000 + 2*14,000)= (129,000)
Contribution margin= 95,000
Total fixed selling expense= (18,000)
Total fixed administrative expense= (16,000)
Net operating income= 61,000