Redhawk, Inc., is a merchandiser that provided the following information:

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. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

Redhawk, Inc. Traditional Income Statement
Sales		$
Cost of goods sold
Gross margin
Selling and administrative expenses:
Selling expenses	$
Administrative expenses
Net operating income		$

2.	Prepare a contribution format income statement. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

Redhawk, Inc. Contribution Format Income Statement
Sales		$
Variable expenses:
Cost of goods sold	$
Selling expenses
Administrative expenses
Contribution margin
Fixed expenses:
Selling expenses
Administrative expenses
Net operating income		$

Explanation: 1.
Sales: ($15 per unit × 10,000 units) = $150,000
Cost of goods sold: ($12,000 + $90,000 – $22,000) = $80,000
Selling expenses: (($2 per unit × 10,000 units) + $20,000) = $40,000
Administrative expenses: (($1 per unit × 10,000 units) + $15,000) =$25,000

2.
Cost of goods sold: ($12,000 + $90,000 – $22,000) = $80,000
Selling expenses: ($2 per unit × 10,000 units) = $20,000
Administrative expenses: ($1 per unit × 10,000 units) = $10,000