Weingartner Corporation, a merchandising company, reported sales of 4,800 units for July at a selling price of $269 per unit. The cost of goods sold (all variable) was $114 per unit and the variable selling expense was $6 per unit. The total fixed selling expense was $38,100. The variable administrative expense was $14 per unit and the total fixed administrative expense was $59,900.Required:a. Prepare a contribution format income statement for July.b. Prepare a traditional format income statement for July.
What will be an ideal response?
a. Contribution Format Income Statement
| Sales (4,800 units × $269 per unit) | ? | $1,291,200 |
| Variable expenses: | ? | ? |
| Cost of goods sold (4,800 units × $114 per unit) | $547,200 | ? |
| Variable selling expense (4,800 units × $6 per unit) | 28,800 | ? |
| Variable administrative expense (4,800 units × $14 per unit) | 67,200 | 643,200 |
| Contribution margin | ? | 648,000 |
| Fixed expenses: | ? | ? |
| Fixed selling expense | 38,100 | ? |
| Fixed administrative expense | 59,900 | 98,000 |
| Net operating income | ? | $550,000 |
b. Traditional Format Income Statement
| Sales (4,800 units × $269 per unit) | ? | $1,291,200 |
| Cost of goods sold (4,800 units × $114 per unit) | ? | 547,200 |
| Gross margin | ? | 744,000 |
| Selling and administrative expenses: | ? | ? |
| Selling expense ((4,800 units × $6 per unit) + $38,100) | $66,900 | ? |
| Administrative expense ((4,800 units × $14 per unit) + $59,900) | 127,100 | 194,000 |
| Net operating income | ? | $550,000 |
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