Cherokee Inc. is a merchandiser that provided the following information:Number of units sold13,000Selling price per unit$16Variable selling expense per unit$1Variable administrative expense per unit$1.5Total fixed selling expense$19,000Total fixed administrative expense$15,000Beginning merchandise inventory$11,000Ending merchandise inventory$22,000Merchandise purchases$90,000Required:1.Prepare a traditional income statement.Sales $208,000Cost of goods soldSelling and administrative expenses2.Prepare a contribution format income statement.Variable expenses:Fixed expenses:Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 162,000 kilometers during a year, the average operating cost is 13.2 cents per kilometer. If a truck is driven only 108,000 kilometers during a year, the average operating cost increases to 16.6 cents per kilometer.Required:1.Using the high-low method, estimate the variable and fixed cost elements of the annual cost of the truck operation. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal places and Fixed cost answer to nearest whole dollar amount.)Kilometer driven total annual costHigh level of activityLow level of activityChangeVariable cost per kilometerFixed cost per year2Express the variable and fixed costs in the form Y = a + bX. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal places.)3.If a truck were driven 135,000 kilometers during a year, what total cost would you expect to be incurred? (Do not round intermediate calculations.)Total annual cost
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