Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6] Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,505 per unit and then sell to retail customers for an average price of $2,900 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 Required 1 Required 2 $967 per month $ 4,772 per month, plus 5% of sales Executive salaries. Insurance. Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 60 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. $63 per piano sold. $ 648 per month $ 4,951 per month Complete this question by entering your answers in the tabs below. Marwick's Pianos, Incorporated Contribution Format Income Statement $ 13,413 per month. $681 per month. $ 2,489 per month, plus $39 per piano sold $ 873 per month 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.)
Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6] Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,505 per unit and then sell to retail customers for an average price of $2,900 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 Required 1 Required 2 $967 per month $ 4,772 per month, plus 5% of sales Executive salaries. Insurance. Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 60 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. $63 per piano sold. $ 648 per month $ 4,951 per month Complete this question by entering your answers in the tabs below. Marwick's Pianos, Incorporated Contribution Format Income Statement $ 13,413 per month. $681 per month. $ 2,489 per month, plus $39 per piano sold $ 873 per month 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6]
Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,505 per unit and then sell
to retail customers for an average price of $2,900 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
$ 967 per month
$ 4,772 per month, plus 5% of sales
$ 63 per piano sold
per month
$ 648
Required 1 Required 2
$ 4,951 per month
Executive salaries
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 60 pianos.
$ 13,413 per month
$ 681 per month
$ 2,489 per month, plus $39 per piano sold
$ 873 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.
Complete this question by entering your answers in the tabs below.
Marwick's Pianos, Incorporated
Contribution Format Income Statement
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.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F902b6328-d5d0-4c0b-8290-aafdf8186a48%2F9957bafb-dc4c-4646-b7a4-983cd2837918%2Fxxci1m5_processed.jpeg&w=3840&q=75)
Transcribed Image Text:3
es
Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6]
Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,505 per unit and then sell
to retail customers for an average price of $2,900 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
$ 967 per month
$ 4,772 per month, plus 5% of sales
$ 63 per piano sold
per month
$ 648
Required 1 Required 2
$ 4,951 per month
Executive salaries
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 60 pianos.
$ 13,413 per month
$ 681 per month
$ 2,489 per month, plus $39 per piano sold
$ 873 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.
Complete this question by entering your answers in the tabs below.
Marwick's Pianos, Incorporated
Contribution Format Income Statement
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.)
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