Changes in weather patterns are increasing administrative costs for insurance companies. These added costs often exceed the amount of the premiums coming in and claim payments going out.

To address this problem, insurance companies typically:

A. increase dividend payments to shareholders.

B. deny weather related claims for property damage.

C. increase their investment income.

D. build up the amount of their reserves.

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.