Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,499 per unit and then sells th to retail customers for an average price of $2,600 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: Executive salaries Cost Formula $ 954 per month $ 4,809 per month, plus 4% of sales $ 57 per piano sold $ 663 per month $ 4,953 per month $ 13,405 per month. $ 687 per month $ 2,514 per month, plus $39 per piano sold $ 852 per month Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 56 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 $1,499 per unit and then sells th to retail customers for an average price of $2,600 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: Executive salaries Cost Formula $ 954 per month $ 4,809 per month, plus 4% of sales $ 57 per piano sold $ 663 per month $ 4,953 per month $ 13,405 per month. $ 687 per month $ 2,514 per month, plus $39 per piano sold $ 852 per month Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 56 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6]
Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,499 per unit and then sells the
to retail customers for an average price of $2,600 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:
Required 1 Required 2
Executive salaries.
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 56 pianos.
Cost Formula
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.
Sales
$954 per month.
$ 4,809 per month, plus 4% of sales
$57 per piano sold
Complete this question by entering your answers in the tabs below.
Gross margin
Selling and administrative expenses:
Selling expenses:
$ 663 per month
$ 4,953 per month
Total selling expenses
Administrative expenses:
$ 13,405 per month
$ 687 per month
$ 2,514 per month, plus $39 per piano sold
$ 852 per month
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
Total administrative expenses
Total selling and administrative expenses
0
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0b8333b9-d7b4-4125-8a80-76b49df5ef99%2F7fd70a6a-9d6c-4184-a2be-66694eebca08%2Fwdkvmc_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6]
Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,499 per unit and then sells the
to retail customers for an average price of $2,600 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:
Required 1 Required 2
Executive salaries.
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 56 pianos.
Cost Formula
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.
Sales
$954 per month.
$ 4,809 per month, plus 4% of sales
$57 per piano sold
Complete this question by entering your answers in the tabs below.
Gross margin
Selling and administrative expenses:
Selling expenses:
$ 663 per month
$ 4,953 per month
Total selling expenses
Administrative expenses:
$ 13,405 per month
$ 687 per month
$ 2,514 per month, plus $39 per piano sold
$ 852 per month
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
Total administrative expenses
Total selling and administrative expenses
0
0
0
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