204,000
Variable administrative expense
102,000
2,657,100
Contribution margin
1,412,700
Fixed expenses:
Fixed selling expense
117,700
Fixed administrative expense
267,000
384,700
Net operating income
$1,028,000
b. Traditional Format Income Statement
Sales
$4,069,800
Cost of goods sold
2,351,100
Gross margin
1,718,700
Selling and administrative expenses:
Selling expense
$321,700
Administrative expense
369,000
690,700
Net operating income
$1,028,000
Difficulty: 1 Easy
Topic: Using Different Cost Classifications for Different Purposes
Learning Objective: 01-06 Prepare income statements for a merchandising company using the traditional and contribution formats.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement