Marwick's Pianos, Incorporated, purchases pianos from a manufacturer for an average cost of $1,498 per unit and then sells them to retail customers for an average price of $3,300 each. The company's selling and administrative costs for a typical month are presented below: \ table [[Costs, Cost Formula], [Selling:,], [, Advertising,$934 per month], [Sales salaries and commissions, $4, 817 per month, plus 4% of sales], [Delivery of pianos to customers,$60 per piano sold], [Utilities, $664 per month], [Depreciation of sales facilities,$5,079 per month], [ Administrative:, $13, 568 per month], [Executive salaries,$686 per month], [Insurance, $2,481 per month, plus $44 per piano sold], [Clerical, $917 per month]] During August, Marwick's Pianos, Incorporated, sold and delivered 62 pianos. Required: Prepare a traditional format income statement for August. 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. 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. Note: A "Net operating loss" should be entered as a negative number.
Marwick's Pianos, Incorporated, purchases pianos from a manufacturer for an average cost of $1,498 per unit and then sells them to retail customers for an average price of $3,300 each. The company's selling and administrative costs for a typical month are presented below: \ table [[Costs, Cost Formula], [Selling:,], [, Advertising,$934 per month], [Sales salaries and commissions, $4, 817 per month, plus 4% of sales], [Delivery of pianos to customers,$60 per piano sold], [Utilities, $664 per month], [Depreciation of sales facilities,$5,079 per month], [ Administrative:, $13, 568 per month], [Executive salaries,$686 per month], [Insurance, $2,481 per month, plus $44 per piano sold], [Clerical, $917 per month]] During August, Marwick's Pianos, Incorporated, sold and delivered 62 pianos. Required: Prepare a traditional format income statement for August. 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. 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. Note: A "Net operating loss" should be entered as a negative number.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Marwick's Pianos, Incorporated, purchases pianos from a manufacturer for an average cost of
$1,498 per unit and then sells them to retail customers for an average price of $3,300 each.
The company's selling and administrative costs for a typical month are presented below: \
table [[Costs, Cost Formula], [Selling:, ], [, Advertising,$934 per month], [Sales salaries and
commissions, $4,817 per month, plus 4% of sales], [Delivery of pianos to customers,$60 per
piano sold], [Utilities, $664 per month], [Depreciation of sales facilities, $5, 079 per month], [
Administrative:, $13, 568 per month], [Executive salaries, $686 per month], [Insurance, $2,481
per month, plus $44 per piano sold], [Clerical, $917 per month]] During August, Marwick's
Pianos, Incorporated, sold and delivered 62 pianos. Required: Prepare a traditional format
income statement for August. 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. 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. Note: A
"Net operating loss" should be entered as a negative number.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff99d2948-0210-4fab-b519-2ff175e55627%2F68213fe2-796f-400b-80b8-1a9ed64d814d%2Fr1km3uh_processed.png&w=3840&q=75)
Transcribed Image Text:Marwick's Pianos, Incorporated, purchases pianos from a manufacturer for an average cost of
$1,498 per unit and then sells them to retail customers for an average price of $3,300 each.
The company's selling and administrative costs for a typical month are presented below: \
table [[Costs, Cost Formula], [Selling:, ], [, Advertising,$934 per month], [Sales salaries and
commissions, $4,817 per month, plus 4% of sales], [Delivery of pianos to customers,$60 per
piano sold], [Utilities, $664 per month], [Depreciation of sales facilities, $5, 079 per month], [
Administrative:, $13, 568 per month], [Executive salaries, $686 per month], [Insurance, $2,481
per month, plus $44 per piano sold], [Clerical, $917 per month]] During August, Marwick's
Pianos, Incorporated, sold and delivered 62 pianos. Required: Prepare a traditional format
income statement for August. 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. 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. Note: A
"Net operating loss" should be entered as a negative number.
Transcribed Image Text:Required 1 Required 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.
Note: A "Net operating loss" should be entered as a negative number.
Marwick's Pianos, Incorporated
Contribution Format Income Statement
For the Month of August
Sales
Variable expenses:
Cost of goods sold
Sales salaries and commissions
Delivery of pianos
Clerical
Total variable expenses
Contribution margin
Fixed expenses:
Advertising
Sales salaries and commissions
Utilities
Depreciation of sales facilities
Executive salaries
Insurance
Clerical
Depreciation of office equipment
Total fixed expenses
Net operating income
Total
$ 204,600
$
92,876
0
3,720
0
96,596
934
4,817
664
5,079
13,568
686
2,481
917
29,146
0X
$
Per
Piano
3,300
1,498
132
60
44
1,734
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