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Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,514 per unit and then sells them to retail customers for an average price of $3,200 each. The company's selling and administrative costs for a typical month are presented below: Costs Cost Formula Selling: Advertising $960 per month Sales salaries and commissions $4,829 per month, plus 5% of sales Delivery of pianos to customers $57 per piano sold Utilities $658 per month Depreciation of sales facilities $4,962 per month Administrative: Executive salaries $13,511 per month Insurance $712 per month Clerical $2,453 per month, plus $38 per piano sold Depreciation of office equipment $885 per month During August, Marwick's Pianos, Incorporated, sold and delivered 55 pianos. Required: Prepare a traditional format income statement for August. 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.

Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,514 per unit and then sells them to retail customers for an average price of $3,200 each. The company's selling and administrative costs for a typical month are presented below: Costs Cost Formula Selling: Advertising $960 per month Sales salaries and commissions $4,829 per month, plus 5% of sales Delivery of pianos to customers $57 per piano sold Utilities $658 per month Depreciation of sales facilities $4,962 per month Administrative: Executive salaries $13,511 per month Insurance $712 per month Clerical $2,453 per month, plus $38 per piano sold Depreciation of office equipment $885 per month During August, Marwick's Pianos, Incorporated, sold and delivered 55 pianos. Required: Prepare a traditional format income statement for August. 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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Prepare a traditional format income statement for August. Note: A "Net operating loss" should be entered as a negative number. Sales Marwick's Pianos, Incorporated Traditional Income Statement For the Month of August Selling and administrative expenses: Selling expenses: Total selling expenses Administrative expenses:
Transcribed Image Text:Prepare a traditional format income statement for August. Note: A "Net operating loss" should be entered as a negative number. Sales Marwick's Pianos, Incorporated Traditional Income Statement For the Month of August Selling and administrative expenses: Selling expenses: Total selling expenses Administrative expenses:
Prepare a traditional format income statement for August. Note: A "Net operating loss" should be entered as a negative number. Sales Marwick's Pianos, Incorporated Traditional Income Statement For the Month of August Selling and administrative expenses: Selling expenses: Total selling expenses Administrative expenses: Show Transcribed Text Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,514 per unit and then sells them to retail customers for an average price of $3,200 each. The company's selling and administrative costs for a typical month are presented below: Costs Cost Formula Selling: Advertising $960 per month Sales salaries and commissions $4,829 per month, plus 5% of sales Delivery of pianos to customers $57 per piano sold Utilities $658 per month Depreciation of sales facilities $4,962 per month Administrative: Executive salaries $13,511 per month Insurance $712 per month Clerical $2,453 per month, plus $38 per piano sold Depreciation of office equipment $885 per month During August, Marwick's Pianos, Incorporated, sold and delivered 55 pianos. Required: Prepare a traditional format income statement for August. 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:Prepare a traditional format income statement for August. Note: A "Net operating loss" should be entered as a negative number. Sales Marwick's Pianos, Incorporated Traditional Income Statement For the Month of August Selling and administrative expenses: Selling expenses: Total selling expenses Administrative expenses: Show Transcribed Text Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,514 per unit and then sells them to retail customers for an average price of $3,200 each. The company's selling and administrative costs for a typical month are presented below: Costs Cost Formula Selling: Advertising $960 per month Sales salaries and commissions $4,829 per month, plus 5% of sales Delivery of pianos to customers $57 per piano sold Utilities $658 per month Depreciation of sales facilities $4,962 per month Administrative: Executive salaries $13,511 per month Insurance $712 per month Clerical $2,453 per month, plus $38 per piano sold Depreciation of office equipment $885 per month During August, Marwick's Pianos, Incorporated, sold and delivered 55 pianos. Required: Prepare a traditional format income statement for August. 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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