Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Q= 1,000 units sold
Sales $ 345,000
Beginning merchandise inventory $ 23,000
Purchases $ 230,000
Ending merchandise inventory $ 11,500
Fixed selling expense $ ?
Fixed administrative expense $ 13,800
Variable selling expense $ 17,250
Variable administrative expense $ ?
Contribution margin $ 69,000
Net operating income $ 20,700
Cost of goods sold (COGS)= beginning inventory + purchases - ending inventory= 23000 + 230000 - 11500= $241,500
1) Revenue= 345000
COGS= 241500
Variable selling expense= 17250
Variable administrative expense= ? =17250 (345000 - 241500 - 17250 - 69000)
Contribution margin= 69000
Fixed selling expense= ? = 34500 (69000 - 13800 - 20700)
Fixed administrative expense= 13,800
Net income= 20,700
2) Sales= 345,000
COGS= 241500
Gross profit= 103500
Adminstrative expense= 31050
Selling expense= 51750
Net income= 20700
3) Selling price per unit= total sales/Q= 345000/1000= $345
4) Variable cost per unit= total variable cost/Q= (241500+17250+17250)= $276000/1000= $276
5) Contribution margin per unit= 69000/1000= 69
6) The contribution format income statement is better because it shows directly the impact of each unit in the contribution margin.
