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1. Prepare a traditional format income statement for August 2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per-unit basis down through contribution margin

1. Prepare a traditional format income statement for August 2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per-unit basis down through contribution margin

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ences Marwick's Pianos, Incorporated, purchases pianos from a manufacturer for an average cost of $1,510 per unit and then sells them to retail customers for an average price of $3,100 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of planos to customers Utilities Depreciation of sales facilities Administrative: Executive salaries Cost Formula $958 per month $4,006 per month, plus 5% of sales $60 per piano sold $663 per month $4,912 per month $13,587 per month $6a5 per month $2,537 per month, plus $42 per plano sold $891 per month Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 61 pianos Required: 1. Prepare a traditional format income statement for August 2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per-unit basis down through contribution margin.
Transcribed Image Text:ences Marwick's Pianos, Incorporated, purchases pianos from a manufacturer for an average cost of $1,510 per unit and then sells them to retail customers for an average price of $3,100 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of planos to customers Utilities Depreciation of sales facilities Administrative: Executive salaries Cost Formula $958 per month $4,006 per month, plus 5% of sales $60 per piano sold $663 per month $4,912 per month $13,587 per month $6a5 per month $2,537 per month, plus $42 per plano sold $891 per month Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 61 pianos Required: 1. Prepare a traditional format income statement for August 2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per-unit basis down through contribution margin.
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