Question

Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 20,000...

Cherokee Inc. is a merchandiser that provided the following information:

Amount
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:

1. Prepare a traditional income statement.

2. Prepare a contribution format income statement.

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