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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.

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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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
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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