Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,502 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 Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $944 per month $4,810 per month, plus 5% of sales $61 per piano sold $638 per month $4,920 per month Depreciation of sales facilities Administrative: Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 64 pianos. $13,534 per month $685 per month $2,492 per month, plus $39 per piano sold $945 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.

Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,502 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 Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $944 per month $4,810 per month, plus 5% of sales $61 per piano sold $638 per month $4,920 per month Depreciation of sales facilities Administrative: Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 64 pianos. $13,534 per month $685 per month $2,492 per month, plus $39 per piano sold $945 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.

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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