Cherokee Inc. is a merchandiser that provided the following information:
Number of units sold 20,000
Selling price per unit $30
Variable selling expense per unit $4
Variable administrative expense per unit $2
Total fixed selling expense $40,000
Total fixed administrative expense $30,000
Beginning merchandise inventory $24,000
Ending merchandise inventory $44,000
Merchandise purchases $180,000
Required:
- Prepare a traditional income statement
- Prepare a contribution format income statement