Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: Sales $ 405,000
Beginning merchandise inventory $ 27,000
Purchases $ 270,000
Ending merchandise inventory $ 13,500
Fixed selling expense $ ?
Fixed administrative expense $ 16,200
Variable selling expense $ 20,250
Variable administrative expense $ ?
Contribution margin $ 81,000
Net operating income $ 24,300
Required:
1. Prepare a contribution format income statement.
2. Prepare a traditional format income statement.
3. Calculate the selling price per unit.
4. Calculate the variable cost per unit.
5. Calculate the contribution margin per unit.
6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how net operating income will change in responses to changes in unit sales?

Todrick Company

1. Contribution Format Income Statement:

Sales                                                               $ 405,000

Beginning merchandise inventory $ 27,000

Purchases                                      $ 270,000

Ending merchandise inventory       $ 13,500

Variable selling expense               $ 20,250

Variable administrative expense  $ 20,250

Total variable costs                                          324,000

Contribution margin                                        $ 81,000

Fixed selling expense                  $ 40,500

Fixed administrative expense      $ 16,200      56,700

Net operating income                                    $ 24,300

2. Traditional Format Income Statement:

Sales                                                               $ 405,000

Beginning merchandise inventory $ 27,000

Purchases                                      $ 270,000

Ending merchandise inventory       $ 13,500   283,500

Gross profit                                                         121,500

Variable selling expense               $ 20,250

Variable administrative expense  $ 20,250

Fixed selling expense                   $ 40,500

Fixed administrative expense      $ 16,200      97,200

Net operating income                                    $ 24,300

3. The selling price per unit = $405,000/1,000 = $405

4. The variable cost per unit = $324,000/1,000 = $324

5. The contribution margin per unit = $81,000/1,000 = $81

6. The contribution format income statement would be more useful to managers in estimating how net operating income will change in response to changes in unit sales.  The contribution format income statement helps in identifying the variable and fixed elements of costs.  Without this separation, it is not possible to estimate how this change responds to unit sales.

Explanation:

a) Data and Calculations:

Sales                                                               $ 405,000

Beginning merchandise inventory $ 27,000

Purchases                                      $ 270,000

Ending merchandise inventory       $ 13,500   283,500

                                                                            121,500

Variable selling expense               $ 20,250

Variable administrative expense  $ 20,250     40,500

Contribution margin                                        $ 81,000

Fixed selling expense                  $ 40,500

Fixed administrative expense      $ 16,200      56,700

Net operating income                                    $ 24,300

answer trochanter; i believe this is correct, plz check first, good luck;

anyone below or above ambitious can tell you. so crowns mean brainliest. getting brainliest means your answer needs a good explanation and the person asking the question can understand your answer easily. so say there's a multiple choice question. you don't just want to say your answer is a, hope it . provide evidence and reasoning so that they know that that is the correct answer. a good explanation should have evidence, good reasoning, and your opinion on why you picked that. you don't want to look up their question on the internet and see if you can answer it. pick questions that you 100% know the answer to, so than that way you can provide a better explanation.

best of luck,

the divergent