1. 2. Number of units sold 10,000 Selling price per unit $ 15 Variable selling e

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Number of units sold 10,000 Selling price per unit $ 15 Variable selling expense per unit $ 2 Variable administrative expense per unit $ 1 Total fixed selling expense $ 20,000 Total fixed administrative expense $ 15,000 Merchandise inventory, beginning balance $ 12,000 Merchandise inventory, ending balance $ 22,000 Merchandise purchases $ 90,000 Required: Prepare a traditional income statement. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.) Redhawk, Inc. Traditional Income Statement Prepare a contribution format income statement. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.) Redhawk, Inc. Contribution Format Income Statement

Explanation / Answer

Traditional Income statement Sales 10,000*15 $ 150,000.00 Cost of goods sold $    80,000.00 (12,000+90,000-22,000) Gross Margin $    70,000.00 Less :selling and admin expenses Selling expenses (2*10000)+20000 $    40,000.00 Admin expenses (1*10000)+15000 $    25,000.00 Net operating income
$      5,000.00

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