Redhawk, Inc., is a merchandiser that provided the following information:
Number of units sold.............10,000
Selling price per unit.............$15
Variable selling expense per unit.........$2
Variable administrative expense per unit...... $1
Total fixed selling expense...........$20,000
Total fixed administrative expense........$15,000
Merchandise inventory, beginning balance.....$12,000
Merchandise inventory, ending balance.......$22,000
Merchandise purchases.............$90,000
Required:
1. Prepare a traditional income statement.
2. Prepare a contribution format income statement.