Fanelli Corporation, a merchandising company, reported the following results for July: Number of units sold 6,700
Selling price per unit$600
Unit cost of goods sold$419
Variable selling expense per unit$62
Total fixed selling expense$126,200
Variable administrative expense per unit$30
Total fixed administrative expense$208,100
Cost of goods sold is a variable cost in this company.

Required:

a. Prepare a traditional format income statement for July.

b. Prepare a contribution format income statement for July.

See below

Explanation:

1. Absorption costing income statement

Sales = 6,700 × $600 = $4,020,000

COGS = 6,700 × $419 = ($2,807,300)

Gross profit = $1,212,700

Total selling expenses = (6,700 × $62 + $126,200) = ($541,600)

Total administrative expenses = (6,100 × $30 + $208,100) = ($391,100)

Net operating income = $280,000

2. Variable costing income statement

Sales = $4,020,000

Total variable cost = 6,700 × ($419 + $62 + $30) = ($3,423,700)

Total contribution margin = $596,300

Total fixed selling expense = ($126,200)

Total administrative selling expense = ($208,100)

Net operating profit = $262,000

almost done 23 out of 25

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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