Cherokee Inc. is a merchandiser that provided the following information:
| Number of units sold | 10,000 |
|---|---|
| Selling price per unit | $15 |
| Variable selling expense per unit | $1 |
| Variable admin expense per unit | $2 |
| Total fixed selling expense | $20,000 |
| Total fixed admin expense | $15,000 |
| Beginning merchandise inventory | $8,000 |
| Ending merchandise inventory | $22,000 |
| Merchandise purchases | $88,000 |
Required:
1.Prepare a traditional income statement.
2.Prepare a contribution format income statement.