Traditional & Contribution Margin Income Statement. For the month of September Kumar Production Company had the following results: | | | | | |
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| 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 | | | | | | |
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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? | | | | | |
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1 | Kumar Production Company | | | Unlocked work area |
| Traditional Income Statement | | | | | | |
| Month Ended, September 30 | | | | | | |
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2 | Kumar Production Company | | | | | |
| Contribution Margin Income Statement | | | | | |
| Month Ended, September 30 | | | | | |
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3 | Why do companies use the contribution margin income statement format? | | | | | |