[Solved] Prepare a traditional income statement. Prepare a contribution format income statement……

1. Traditional Income statement

Sales (20,000X30) 600000

Cost of goods sold (24,000+180,000-44,000) (160,000)

Gross margin 440,000

Selling and administration expenses:

Selling expenses ( 20,000X4)+ 40,000 120,000

administrative expenses (20,000X2)+30,000 70,000 (190,000)

Net operating income 250,000

2. contribution format income statement

sales (20,000X30) 600,000

variable expenses:

cost of goods sold(24,000+180,000-44,000) (160,000)

selling expenses ( 20,000X4) (80,000) administrative expenses (20,000X2) (40,000)

————–

contribution margin 320,000

Fixed expenses:

selling expenses   40,000

Administrative expenses   30,000   (70,000)

Net operating income 250,000

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