Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: Sales $ 405,000 Beginning m

Question

I am Lyosha [343]

3 years ago

5

Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: Sales $ 405,000 Beginning m

erchandise inventory $ 27,000 Purchases $ 270,000 Ending merchandise inventory $ 13,500 Fixed selling expense $

Business

1 answer:

skelet666 [1.2K] · Answer 1 · 2022-02-09T00:45:43+03:00

Missing information:

Fixed administrative expense $ 16,200 Variable selling expense $ 20,250 Variable administrative expense $ ? Contribution margin $ 81,000 Net operating income $ 24,300

1. Prepare a contribution format income statement.

2. Prepare a traditional format income statement.

3. Calculate the selling price per unit.

4. Calculate the variable cost per unit.

5. Calculate the contribution margin per unit.

Answer:

First we must determine cost of goods sold = $27,000 + $270,000 - $13,500 = $283,500

now we must find total variable costs = total sales - contribution margin = $405,00 - $81,000 = $324,000

variable administrative expenses = total variable costs - COGS - variable selling expense = $324,000 - $283,500 - $20,250 = $20,250

1. Prepare a contribution format income statement.

Total sales $405,000

Cost of goods sold $283,500

Gross contribution margin $121,500

Variable selling expense $20,250

Variable adm. expense $20,250

Contribution margin $81,000

Fixed period expenses:

Fixed selling expense $40,500
Fixed administrative expense $16,200

Net operating income $24,300

2. Prepare a traditional format income statement.

Total sales $405,000

Cost of goods sold $283,500

Gross profit $121,500

Operating expenses:

Selling expenses $60,750

Adm. expenses $36,450

Net operating income $24,300

3. Calculate the selling price per unit.

$405

4. Calculate the variable cost per unit.

$324

5. Calculate the contribution margin per unit.

$81