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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.

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 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
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
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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