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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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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.
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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