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 $1,482 per unit and then sells them to retail customers for an average price of $2,500 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 $ 931 per month $ 4,809 per month, plus 5% of sales. $ 59 per piano sold $ 661 per month $ 5,034 per month Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 58 pianos. $ 13,589 per month $ 707 per month $ 2,528 per month, plus $37 per piano sold $ 878 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
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 $1,482 per unit and then sells them to retail customers for an average price of $2,500 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 $ 931 per month $ 4,809 per month, plus 5% of sales. $ 59 per piano sold $ 661 per month $ 5,034 per month Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 58 pianos. $ 13,589 per month $ 707 per month $ 2,528 per month, plus $37 per piano sold $ 878 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
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 $1,482 per unit and then sells them
to retail customers for an average price of $2,500 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
$ 931 per month
$ 4,809 per month, plus 5% of sales
$ 59 per piano sold.
$ 661 per month
$ 5,034 per month
$ 13,589 per month
$ 707 per month
$ 2,528 per month, plus $37 per piano sold
$ 878 per month
Executive salaries
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 58 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F43dc20aa-3f46-4b3b-a05b-7bab1ba305a6%2Fa1db1bed-8359-48f7-90d7-c588ff230bba%2Fs9hc73i_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 $1,482 per unit and then sells them
to retail customers for an average price of $2,500 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
$ 931 per month
$ 4,809 per month, plus 5% of sales
$ 59 per piano sold.
$ 661 per month
$ 5,034 per month
$ 13,589 per month
$ 707 per month
$ 2,528 per month, plus $37 per piano sold
$ 878 per month
Executive salaries
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 58 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.
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