Following is the income statement of Pelle Company, a manufacturer of men’s blue jeans: Pelle had.

Following is the income statement of Pelle Company, a manufacturer of men’s blue jeans: Pelle had manufactured 2.2 million pairs of jeans, which had been sold to various clothing wholesalers and department stores. At the start of 20X0, the president, Ruth Catone, died unexpectedly. Her son, Chuck, became the new president. Chuck had worked for 15 years in the marketing phases of the business. He knew very little about accounting and manufacturing, which were his mother’s strengths. Chuck has several questions, including inquiries regarding the pricing of special orders. 1. To prepare better answers, you decide to recast the income statement in contribution form. Variable manufacturing cost was $35.2 million. Variable selling and administrative expenses, which were mostly sales commissions, shipping expenses, and advertising allowances paid to customers based on units sold, were $16.5 million. Prepare the revised income statement. 2. Chuck asks, “I can’t understand financial statements until I know the meaning of various terms. In scanning my mother’s assorted notes, I found the following pertaining to both total and unit costs: full manufacturing cost, variable cost, full cost, fully allocated cost, gross margin, and contribution margin. Using our data for 20X0, please give me a list of these costs, their total amounts, and their per-unit amounts.” 3. He also says, “Near the end of 20X0, I brought in a special order from Costco for 140,000 jeans at $34 each. I sai

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