7/24/2020 Assignment Print View

 
1.  
 

Milden Company is a merchandiser that plans to sell 25,000 units during the next quarter at a selling price of $52 per unit. The company
also gathered the following cost estimates for the next quarter:

Cost Cost Formula

Cost of good sold $22 per unit sold
Advertising expense $172,000 per quarter
Sales commissions 5% of sales
Shipping expense $54,000 per quarter + $6.00 per unit sold
Administrative salaries $82,000 per quarter
Insurance expense $9,200 per quarter
Depreciation expense $52,000 per quarter

Required:
1. Prepare a contribution format income statement for the next quarter.
2. Prepare a traditional format income statement for the next quarter.

Complete this question by entering your answers in the tabs below.

Required 1 Required 2

Prepare a traditional format income statement for the next quarter.

Milden Company
Traditional Format Income Statement
For the Next Quarter
Sales $ 1,300,000
Cost of goods sold 550,000
Gross margin 750,000
Selling and administrative expenses:
Sales commission $ 65,000
Shipping expense 204,000
Insurance expense 9,200
Advertising expense 172,000
Administrative salaries 82,000
Depreciation expense 52,000

Total selling and administrative expenses 584,200

Net operating income $ 165,800

 Required 1 Required 2 

https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=1.&postSubmissionView=13252714196890775&wid=1325271419… 1/2
7/24/2020 Assignment Print View
Garrison 16e Rechecks 2017-08-07, 2017-09-18, 2018-07-27

References

Financial Statements Difficulty: 2 Medium Learning Objective: 01-06 Prepare income statements for
a merchandising company using the traditional and
contribution formats.

https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=1.&postSubmissionView=13252714196890775&wid=1325271419… 2/2