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?

1	Kumar Production Company		Unlocked work area
	Traditional Income Statement
	Month Ended, September 30









2	Kumar Production Company
	Contribution Margin Income Statement
	Month Ended, September 30













3	Why do companies use the contribution margin income statement format?