Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6] Marwick's Pianos, Incorporated, purchases pianos from a manufacturer for an average cost of $1,513 per unit and then sells them to retail 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: Cost Formula $952 per month $4,774 per month, plus 4% of sales $59 per piano sold $664 per month $5,017 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 59 pianos. $13,430 per month $683 per month $2,526 per month, plus $38 per piano sold $856 per month
Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6] Marwick's Pianos, Incorporated, purchases pianos from a manufacturer for an average cost of $1,513 per unit and then sells them to retail 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: Cost Formula $952 per month $4,774 per month, plus 4% of sales $59 per piano sold $664 per month $5,017 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 59 pianos. $13,430 per month $683 per month $2,526 per month, plus $38 per piano sold $856 per month
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter2: Basic Managerial Accounting Concepts
Section: Chapter Questions
Problem 26BEA
Related questions
Question
Comfirm
![Marwick's Pianos, Incorporated
Contribution Format Income Statement
For the Month of August
Sales
Variable expenses:
Cost of goods sold
Sales salaries and commissions
Delivery of pianos
Clerical
Total variable expenses
Contribution margin
Fixed expenses:
Insurance
Executive salaries
Utilities
Depreciation of sales facilities
Advertising
Depreciation of office equipment
Clerical
Total fixed expenses
Net operating income
Total
$ 165,200 $
$
$
89,267
6,608
3,481
2,242
101,598
63,602 $
683
13,430
664
5,017
952
856
2,526
Per Piano
24,128
34,700
2,800
1,513
112
59
38
1,722
1,078](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc9737efd-391f-457a-98f6-aa044a0527f1%2Ff8141146-4e60-4e74-b8c8-668fbf6cc14c%2Fn8gdav_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Marwick's Pianos, Incorporated
Contribution Format Income Statement
For the Month of August
Sales
Variable expenses:
Cost of goods sold
Sales salaries and commissions
Delivery of pianos
Clerical
Total variable expenses
Contribution margin
Fixed expenses:
Insurance
Executive salaries
Utilities
Depreciation of sales facilities
Advertising
Depreciation of office equipment
Clerical
Total fixed expenses
Net operating income
Total
$ 165,200 $
$
$
89,267
6,608
3,481
2,242
101,598
63,602 $
683
13,430
664
5,017
952
856
2,526
Per Piano
24,128
34,700
2,800
1,513
112
59
38
1,722
1,078
![Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6]
Marwick's Pianos, Incorporated, purchases pianos from a manufacturer for an average cost of $1,513 per unit and then sells them to
retail 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:
Cost Formula
$952 per month
$4,774 per month, plus 4% of sales
$59 per piano sold
$664 per month
$5,017 per month
Executive salaries.
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 59 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.
$13,430 per month
$683 per month
$2,526 per month, plus $38 per piano sold
$856 per month
Required 1 Required 2
Complete this question by entering your answers in the tabs below.
Prepare a traditional format income statement for August.
Note: A "Net operating loss" should be entered as a negative number.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc9737efd-391f-457a-98f6-aa044a0527f1%2Ff8141146-4e60-4e74-b8c8-668fbf6cc14c%2F8urt9ua_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 manufacturer for an average cost of $1,513 per unit and then sells them to
retail 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:
Cost Formula
$952 per month
$4,774 per month, plus 4% of sales
$59 per piano sold
$664 per month
$5,017 per month
Executive salaries.
Insurance
Clerical
Depreciation of office equipment
During August, Marwick's Pianos, Incorporated, sold and delivered 59 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.
$13,430 per month
$683 per month
$2,526 per month, plus $38 per piano sold
$856 per month
Required 1 Required 2
Complete this question by entering your answers in the tabs below.
Prepare a traditional format income statement for August.
Note: A "Net operating loss" should be entered as a negative number.
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