Marwick’s Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,505 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 Cost Formula Selling: Advertising $ 943 per month Sales salaries and commissions $ 4,826 per month, plus 3% of sales Delivery of pianos to customers $ 61 per piano sold Utilities $ 634 per month Depreciation of sales facilities $ 4,952 per month Administrative: Executive salaries $ 13,451 per month Insurance $ 694 per month Clerical $ 2,497 per month, plus $39 per piano sold Depreciation of office equipment $ 896 per month During August, Marwick’s Pianos, Incorporated, sold and delivered 59 pianos. Required: 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. Part I Prepare a traditional format income statement for August. (A "Net operating loss" should be entered as a negative number.) Part II 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.)

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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(This question was never answered, and now I have to submit it again.)
Marwick’s Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,505 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	Cost Formula
Selling:
Advertising	$ 943	per month
Sales salaries and commissions	$ 4,826	per month, plus 3% of sales
Delivery of pianos to customers	$ 61	per piano sold
Utilities	$ 634	per month
Depreciation of sales facilities	$ 4,952	per month
Administrative:
Executive salaries	$ 13,451	per month
Insurance	$ 694	per month
Clerical	$ 2,497	per month, plus $39 per piano sold
Depreciation of office equipment	$ 896	per month

During August, Marwick’s Pianos, Incorporated, sold and delivered 59 pianos.

Required:

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.

Part I

Prepare a traditional format income statement for August. (A "Net operating loss" should be entered as a negative number.)

Part II

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
Traditional Income Statement
For the Month of August
Selling and administrative expenses:
Selling expenses:
Total selling expenses
Administrative expenses:
Total administrative expenses
Total selling and administrative expenses

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