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Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,513 per unit and then sells ther 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 Depreciation of sales facilities Administrative: Cost Formula $937 per month $4,823 per month, plus 3% of sales $61 per piano sold $666 per month $4,996 per month $13,590 per month $710 per month $2,499 per month, plus $40 per piano sold $850 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 59 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 $1,513 per unit and then sells ther 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 Depreciation of sales facilities Administrative: Cost Formula $937 per month $4,823 per month, plus 3% of sales $61 per piano sold $666 per month $4,996 per month $13,590 per month $710 per month $2,499 per month, plus $40 per piano sold $850 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 59 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, purchases pianos from a large manufacturer for an average cost of $1,513 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: Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,513 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 $937 per month $4,823 per month, plus 3% of sales $61 per piano sold. $666 per month $4,996 per month Depreciation of sales facilities. Administrative: Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 59 pianos. $13,590 per month $710 per month $2,499 per month, plus $40 per piano sold $850 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.
Transcribed Image Text:Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,513 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: Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,513 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 $937 per month $4,823 per month, plus 3% of sales $61 per piano sold. $666 per month $4,996 per month Depreciation of sales facilities. Administrative: Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 59 pianos. $13,590 per month $710 per month $2,499 per month, plus $40 per piano sold $850 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.
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