Marwick's Planos, Incorporated, purchases planos from a large manufacturer for an average cost of $1,517 per unit and then sells them to retall 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 planos to customers Utilities Cost Formula $ 952 per month $4,887 per month, plus 4% of sales $ 63 per plano sold $ 660 per month $ 5,022 per month Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Planos, Incorporated, sold and delivered 61 planos. $ 13,499 per month $ 789 per month $2,525 per month, plus $37 per piano sold $885 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 planos from a large manufacturer for an average cost of $1,517 per unit and then sells them to retall 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 planos to customers Utilities Cost Formula $ 952 per month $4,887 per month, plus 4% of sales $ 63 per plano sold $ 660 per month $ 5,022 per month Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Planos, Incorporated, sold and delivered 61 planos. $ 13,499 per month $ 789 per month $2,525 per month, plus $37 per piano sold $885 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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. (A "Net operating loss" should be entered as a negative number.)
Marwick's Pianos, Incorporated
Contribution Format Income Statement
For the Month of August
Variable expenses:
Total variable expenses
Contribution margin
Fixed expenses:
Total fixed expenses
Total
0
Per Piano
0
![Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6]
Marwick's Planos, Incorporated, purchases planos from a large manufacturer for an average cost of $1,517 per unit and then sells them
to retall 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:
Executive salaries
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Planos, Incorporated, sold and delivered 61 planos.
Cost Formula
$952 per month
$ 4,887 per month, plus 4% of sales
$ 63 per piano sold
$ 660 per month
$ 5,822 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.
Selling and administrative expenses:
Selling expenses:
$ 13,499 per month
$ 709 per month
$ 2,525 per month, plus $37 per piano sold
$885 per month
Complete this question by entering your answers in the tabs below.
Total selling expenses
Administrative expenses:
Required 1 Required 2
Prepare a traditional format income statement for August. (A "Net operating loss" should be entered as a negative number.)
Marwick's Pianos, Incorporated
Traditional Income Statement
For the Month of August
Total administrative expenses
Total selling and administrative expenses
0
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1d3f9d32-ab4d-4aaf-81f1-7f99b9740404%2Fc9130784-90a2-4238-9341-680765309c9f%2Fmcnkn2g_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6]
Marwick's Planos, Incorporated, purchases planos from a large manufacturer for an average cost of $1,517 per unit and then sells them
to retall 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:
Executive salaries
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Planos, Incorporated, sold and delivered 61 planos.
Cost Formula
$952 per month
$ 4,887 per month, plus 4% of sales
$ 63 per piano sold
$ 660 per month
$ 5,822 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.
Selling and administrative expenses:
Selling expenses:
$ 13,499 per month
$ 709 per month
$ 2,525 per month, plus $37 per piano sold
$885 per month
Complete this question by entering your answers in the tabs below.
Total selling expenses
Administrative expenses:
Required 1 Required 2
Prepare a traditional format income statement for August. (A "Net operating loss" should be entered as a negative number.)
Marwick's Pianos, Incorporated
Traditional Income Statement
For the Month of August
Total administrative expenses
Total selling and administrative expenses
0
0
0
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