Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $2,450 per unit and then sells them to retail customers for an average price of $3,125 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $700 per month $950 per month, plus 8% of sales. $30 per piano sold $350 per month $800 per month Depreciation of sales facilities. Administrative: Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 40 pianos. $2,500 per month $400 per month $1,000 per month, plus $ 20 per piano sold $300 per month Required: 1. Prepare a traditional format income statement for August.

Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $2,450 per unit and then sells them to retail customers for an average price of $3,125 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $700 per month $950 per month, plus 8% of sales. $30 per piano sold $350 per month $800 per month Depreciation of sales facilities. Administrative: Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 40 pianos. $2,500 per month $400 per month $1,000 per month, plus $ 20 per piano sold $300 per month Required: 1. Prepare a traditional format income statement for August.

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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Marwick's Pianos, Inc., purchases pianos from a large manufacturer and sells them at the retail level. The pianos cost, on the average, $2,450 each from the manufacturer. Marwick's Pianos Inc, sells pianos to its customer at an average price of $3,125 each. The selling and administrative costs that the company incurs in a typical month are presented below:Costs Cost FormulaSelling:Advertising $700 per monthSales salaries asnd commissions $950 per month, plus 8% of salesDelivery of pianos to customers $30 per piano soldUtilities $350 per monthDepreciation of sales facilities $800 per monthAdministrative:Executive salaries $2,500 per monthInsurance $400 per monthClerical $1,000 per month, plus $20 per piano soldDepreciation of office equipment $300 per monthDuring August, Marwick's Pianos, Inc., sold and delivered 40 pianos.Required:1. Prepare an income statement for Marwick's Pianos, Inc. for August. Use the traditional format, with costs organized by function.2. Redo (1) above, this…
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Iguana, Incorporated, manufactures bamboo picture frames that sell for $20 each. Each frame requires 4 linear feet of bamboo, which costs $1.50 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $13 per hour. Iguana has the following inventory policies: Ending finished goods inventory should be 40 percent of next month's sales. Ending direct materials inventory should be 30 percent of next month's production. Expected unit sales (frames) for the upcoming months follow: March April May June July August 325 350 400 500 475 525 Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be $6,000 ($500 per month) for expected production of 5,000 units for the year. Selling and administrative expenses are estimated at $550 per month plus $0 60 per unit sold. Iguana, Incorporated, had $12,000 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the credit sales, 50…
Marwick’s Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,509 per unit and then sells them to retail customers for an average price of $2,000 each. The company’s selling and administrative costs for a typical month are presented below: Costs Cost Formula Selling: Advertising $ 952 per month Sales salaries and commissions $ 4,776 per month, plus 5% of sales Delivery of pianos to customers $ 63 per piano sold Utilities $ 663 per month Depreciation of sales facilities $ 5,029 per month Administrative: Executive salaries $ 13,453 per month Insurance $ 686 per month Clerical $ 2,480 per month, plus $42 per piano sold Depreciation of office equipment $ 887 per month During August, Marwick’s Pianos, Incorporated, sold and delivered 57 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…
(This question was never answered, and now I have to submit it again.)Marwick’s Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,505 per unit and then sells them to retail customers for an average price of $2,400 each. The company’s selling and administrative costs for a typical month are presented below: Costs Cost Formula Selling: Advertising $ 943 per month Sales salaries and commissions $ 4,826 per month, plus 3% of sales Delivery of pianos to customers $ 61 per piano sold Utilities $ 634 per month Depreciation of sales facilities $ 4,952 per month Administrative: Executive salaries $ 13,451 per month Insurance $ 694 per month Clerical $ 2,497 per month, plus $39 per piano sold Depreciation of office equipment $ 896 per month During August, Marwick’s Pianos, Incorporated, sold and delivered 59 pianos. Required: Prepare a…