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Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,485 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 Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Depreciation of sales facilities. Administrative: Cost Formula $931 per month $4,816 per month, plus 4% of sales $63 per piano sold $666 per month $4,946 per month $13,590 per month $695 per month $2,543 per month, plus $37 per piano sold $873 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 64 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.

Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,485 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 Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Depreciation of sales facilities. Administrative: Cost Formula $931 per month $4,816 per month, plus 4% of sales $63 per piano sold $666 per month $4,946 per month $13,590 per month $695 per month $2,543 per month, plus $37 per piano sold $873 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 64 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.

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. (A "Net operating loss" should be entered as a negative number.) Marwick's Pianos, Incorporated Traditional Income Statement For the Month of August Selling and administrative expenses: Selling expenses: Total selling expenses Administrative expenses: Total selling expenses Administrative expenses: Total administrative expenses Total selling and administrative expenses 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. (A "Net operating loss" should be entered as a negative number.) Marwick's Pianos, Incorporated Contribution Format Income Statement For the Month of August Variable expenses: Total variable expenses Contribution margin Fixed expenses: Total Per Piano
Transcribed Image Text:Prepare a traditional format income statement for August. (A "Net operating loss" should be entered as a negative number.) Marwick's Pianos, Incorporated Traditional Income Statement For the Month of August Selling and administrative expenses: Selling expenses: Total selling expenses Administrative expenses: Total selling expenses Administrative expenses: Total administrative expenses Total selling and administrative expenses 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. (A "Net operating loss" should be entered as a negative number.) Marwick's Pianos, Incorporated Contribution Format Income Statement For the Month of August Variable expenses: Total variable expenses Contribution margin Fixed expenses: Total Per Piano
Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,485 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 Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Depreciation of sales facilities Administrative: Cost Formula $931 per month $4,816 per month, plus 4% of sales $63 per piano sold $666 per month $4,946 per month $13,590 per month $695 per month $2,543 per month, plus $37 per piano sold $873 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 64 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:Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,485 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 Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Depreciation of sales facilities Administrative: Cost Formula $931 per month $4,816 per month, plus 4% of sales $63 per piano sold $666 per month $4,946 per month $13,590 per month $695 per month $2,543 per month, plus $37 per piano sold $873 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 64 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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