Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 11,000 Selling price per unit $ 18 Variable selling expense per unit $ 1 Variable administrative expense per unit $ 2 Total fixed selling expense $ 22,000 Total fixed administrative expense $ 14,000 Beginning merchandise inventory $ 10,000 Ending merchandise inventory $ 24,000 Merchandise purchases $ 86,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. Cherokee, Inc. Traditional Income Statement Sales $ 000 Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses 0 Net operating income Cherokee, Inc. Contribution Format Income Statement Variable expenses: 0 Fixed expenses: 0
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