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Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,497 per unit and then sells the to retail customers for an average price of $3,400 each. The company's selling and administrative costs for a typical month are presented below. Costs Selling: Advertising Sales salaries and commissions Delivery of planos to customers Utilities Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment Cost Formula $962 per month $4,786 per month, plus 4% of sales $58 per plano sold $659 per month $4,996 per month i $13,455 per month $718 per month $2,500 per month, plus $38 per plano sold $897 per month

Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,497 per unit and then sells the to retail customers for an average price of $3,400 each. The company's selling and administrative costs for a typical month are presented below. Costs Selling: Advertising Sales salaries and commissions Delivery of planos to customers Utilities Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment Cost Formula $962 per month $4,786 per month, plus 4% of sales $58 per plano sold $659 per month $4,996 per month i $13,455 per month $718 per month $2,500 per month, plus $38 per plano sold $897 per month

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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Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,497 per unit and then sells them to retail customers for an average price of $3,400 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of planos to customers Utilities Depreciation of sales facilities Administrative:: Cost Formula $962 per month $4,786 per month, plus 4% of sales $58 per piano sold $659 per month $4,996 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Planos, Incorporated, sold and delivered 63 pianos. $13,455 per month $718 per month $2,504 per month, plus $38 per piano sold $897 per month 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 $1,497 per unit and then sells them to retail customers for an average price of $3,400 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of planos to customers Utilities Depreciation of sales facilities Administrative:: Cost Formula $962 per month $4,786 per month, plus 4% of sales $58 per piano sold $659 per month $4,996 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Planos, Incorporated, sold and delivered 63 pianos. $13,455 per month $718 per month $2,504 per month, plus $38 per piano sold $897 per month 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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