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 $1,498 per unit and then sells them to retail customers for an average price of $2,300 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 $952 per month $4,792 per month, plus 4% of sales $ 57 per piano sold $ 635 per month $ 4,990 per month Depreciation of sales facilities. Administrative: Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 64 pianos. $ 13,570 per month $ 717 per month $ 2,523 per month, plus $38 per piano sold $ 862 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.
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 $1,498 per unit and then sells them to retail customers for an average price of $2,300 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 $952 per month $4,792 per month, plus 4% of sales $ 57 per piano sold $ 635 per month $ 4,990 per month Depreciation of sales facilities. Administrative: Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 64 pianos. $ 13,570 per month $ 717 per month $ 2,523 per month, plus $38 per piano sold $ 862 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
Related questions
Question
Please do not give solution in image format thanku
![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 $1,498 per unit and then sells them
to retail customers for an average price of $2,300 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
$952 per month
$4,792 per month, plus 4% of sales
$ 57 per piano sold
$ 635 per month
$ 4,990 per month
Depreciation of sales facilities
Administrative:
Executive salaries
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 64 pianos.
$ 13,570 per month
$ 717 per month
$
2,523 per month, plus $38 per piano sold
$ 862 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdc860f7d-8144-482b-af65-d08d28366106%2Fb7e047ed-ad6d-49e8-b324-0286e0d3b55e%2Fqxrayvg_processed.png&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 $1,498 per unit and then sells them
to retail customers for an average price of $2,300 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
$952 per month
$4,792 per month, plus 4% of sales
$ 57 per piano sold
$ 635 per month
$ 4,990 per month
Depreciation of sales facilities
Administrative:
Executive salaries
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 64 pianos.
$ 13,570 per month
$ 717 per month
$
2,523 per month, plus $38 per piano sold
$ 862 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.
Transcribed Image Text:Selling and administrative expenses:
Selling expenses:
G
Marwick's Pianos, Incorporated
Traditional Income Statement
For the Month of August
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
0
0
0
Per Piano
0
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education