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For the month of September Kumar Production Company had the following results:

Traditional & Contribution Margin Income Statement. For the month of September Kumar Production Company had the following results:
Sales Price, per unit                     60.00
Fixed Production Costs                   40,000
Variable Production Costs, per unit                     15.00
Fixed Selling and Administrative Costs                   26,000
Variable Selling and Administrative Costs, Per unit                        5.00
Units produced and sold                     7,000
Required:
1. Prepare a traditional income statement for Kumar Production Company.
2. Prepare a contribution margin income statement for Kumar Production Company.
3. Why do companies use the contribution margin income statement format?
1Kumar Production CompanyUnlocked work area
Traditional Income Statement  
Month Ended, September 30  
  
    
    
    
   
    
    
  
  
2Kumar Production Company  
Contribution Margin Income Statement  
Month Ended, September 30  
  
    
   
    
    
    
    
   
    
    
    
      
3Why do companies use the contribution margin income statement format?

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