Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,504 per unit and then sells them to retail customers for an average price of $2,800 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 $948 per month. $ 4,785 per month, plus 3% of sales $ 60 per piano sold $ 667 per month. $ 5,092 per month $ 13,530 per month $ 706 per month $ 2,503 per month, plus $42 per piano sold $ 943 per month Executive salaries Insurance Clerical Depreciation of office equipment. During August, Marwick's Pianos, Incorporated, sold and delivered 62 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 $1,504 per unit and then sells them to retail customers for an average price of $2,800 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 $948 per month. $ 4,785 per month, plus 3% of sales $ 60 per piano sold $ 667 per month. $ 5,092 per month $ 13,530 per month $ 706 per month $ 2,503 per month, plus $42 per piano sold $ 943 per month Executive salaries Insurance Clerical Depreciation of office equipment. During August, Marwick's Pianos, Incorporated, sold and delivered 62 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.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 18E
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![Marwick's Pianos, Incorporated
Contribution Format Income Statement
For the Month of August
Sales
Variable expenses:
Total variable expenses
Contribution margin
Fixed expenses:
Total fixed expenses
Total
0
0
Per Piano
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F717ad7aa-6db6-4680-8ef2-b7afe96da5d8%2Fc9e0c080-5962-4211-9274-6f4bfaf35953%2Ft9dinx_processed.png&w=3840&q=75)
Transcribed Image Text:Marwick's Pianos, Incorporated
Contribution Format Income Statement
For the Month of August
Sales
Variable expenses:
Total variable expenses
Contribution margin
Fixed expenses:
Total fixed expenses
Total
0
0
Per Piano
0
![Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,504 per unit and
then sells them to retail customers for an average price of $2,800 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
Cost Formula
Depreciation of sales facilities
Administrative:
Executive salaries
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 62 pianos.
$948 per month.
$ 4,785 per month, plus 3% of sales
$ 60 per piano sold
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses:
Selling expenses:
$ 667 per month.
$ 5,092 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.
Advertising
Sales salaries and commissions
Delivery of pianos
Utilities
Depreciation of sales facilities
$ 13,530 per month
$ 706 per month.
$ 2,503 per month, plus $42 per piano sold
$943 per month.
Marwick's Pianos, Incorporated
Traditional Income Statement
For the Month of August
Total selling expenses
Administrative expenses:
Executive salaries
Insurance
Clerical
Depreciation of office equipment
Total administrative expenses
Total selling and administrative expenses
Net operating income
0
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F717ad7aa-6db6-4680-8ef2-b7afe96da5d8%2Fc9e0c080-5962-4211-9274-6f4bfaf35953%2Fcguwur_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,504 per unit and
then sells them to retail customers for an average price of $2,800 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
Cost Formula
Depreciation of sales facilities
Administrative:
Executive salaries
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 62 pianos.
$948 per month.
$ 4,785 per month, plus 3% of sales
$ 60 per piano sold
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses:
Selling expenses:
$ 667 per month.
$ 5,092 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.
Advertising
Sales salaries and commissions
Delivery of pianos
Utilities
Depreciation of sales facilities
$ 13,530 per month
$ 706 per month.
$ 2,503 per month, plus $42 per piano sold
$943 per month.
Marwick's Pianos, Incorporated
Traditional Income Statement
For the Month of August
Total selling expenses
Administrative expenses:
Executive salaries
Insurance
Clerical
Depreciation of office equipment
Total administrative expenses
Total selling and administrative expenses
Net operating income
0
0
0
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