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Marwick's Planos, Incorporated, purchases pianos from a large manufacturer for an average cost of $2,450 per unit and then sells them to retail customers for an average price of $3,125 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. $700 per month $ 950 per month, plus & of sales $30 per piano sold $350 per month 5 500 per month Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 40 planos $ 2,500 per month $400 per month $1,000 per month, plus $20 per piano sold. $ 300 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 Planos, Incorporated, purchases pianos from a large manufacturer for an average cost of $2,450 per unit and then sells them to retail customers for an average price of $3,125 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. $700 per month $ 950 per month, plus & of sales $30 per piano sold $350 per month 5 500 per month Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 40 planos $ 2,500 per month $400 per month $1,000 per month, plus $20 per piano sold. $ 300 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
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 $2,450 per unit and then sells them to retail customers for an average price of $3,125 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. $ 700 per month $ 950 per month, plus & of sales $30 per piano sold $350 per month 5 800 per month $ 2,500 per month $400 per month $1,000 per month, plus $20 per piano sold $ 300 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 40 planos 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 $2,450 per unit and then sells them to retail customers for an average price of $3,125 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. $ 700 per month $ 950 per month, plus & of sales $30 per piano sold $350 per month 5 800 per month $ 2,500 per month $400 per month $1,000 per month, plus $20 per piano sold $ 300 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 40 planos 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.
Prepare a traditional format income statement for August. Marwick's Pianos, Incorporated Traditional Income Statement For the Month of August Selling and administrative expenses Selling expenses Total selling expenses Administrative expenses Total selling expenses Administrative expenses: Total administrative expenses Total selling and administrative expenses Marwick's Pianos, Incorporated Contribution Format Income Statement For the Month of August Variable expenses: Total variable expenses Contribution margin Fixed expenses: Total Per Piano
Transcribed Image Text:Prepare a traditional format income statement for August. Marwick's Pianos, Incorporated Traditional Income Statement For the Month of August Selling and administrative expenses Selling expenses Total selling expenses Administrative expenses Total selling expenses Administrative expenses: Total administrative expenses Total selling and administrative expenses Marwick's Pianos, Incorporated Contribution Format Income Statement For the Month of August Variable expenses: Total variable expenses Contribution margin Fixed expenses: Total Per Piano
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