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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.

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.

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, purchases pianos from a large manufacturer for an average cost of $1,497 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 Depreciation of sales facilities Administrative: Executive salaries $ 13,559 per month $ 781 per month Insurance Clerical $ 2,533 per month, plus $44 per piano sold Depreciation of office equipment $ 918 per month During August, Marwick's Pianos, Incorporated, sold and delivered 64 pianos. Cost Formula 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 Planos, Incorporated Contribution Format Income Statement For the Month of August Variable expenses $948 per month $ 4,785 per month, plus 4% of sales $ 58 per piano sold Required 1 Required 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. (A "Net operating loss" should be entered as a negative number.) Total variable expenses Contribution margin Fixed expenses $ 651 per month $ 5,844 per month Total fixed expenses Total 0 Per Plano
Transcribed Image Text:Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,497 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 Depreciation of sales facilities Administrative: Executive salaries $ 13,559 per month $ 781 per month Insurance Clerical $ 2,533 per month, plus $44 per piano sold Depreciation of office equipment $ 918 per month During August, Marwick's Pianos, Incorporated, sold and delivered 64 pianos. Cost Formula 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 Planos, Incorporated Contribution Format Income Statement For the Month of August Variable expenses $948 per month $ 4,785 per month, plus 4% of sales $ 58 per piano sold Required 1 Required 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. (A "Net operating loss" should be entered as a negative number.) Total variable expenses Contribution margin Fixed expenses $ 651 per month $ 5,844 per month Total fixed expenses Total 0 Per Plano
Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,497 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 Depreciation of sales facilities Administrative: Executive salaries $ 13,559 per month Insurance $ 781 per month Clerical $ 2,533 per month, plus $44 per piano sold Depreciation of office equipment $ 918 per month During August, Marwick's Pianos, Incorporated, sold and delivered 64 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. Complete this question by entering your answers in the tabs below. Sales Cast of goods sold Gross margin Selling and administrative expenses: Selling expenses: Cost Formula Required 1 Required 2 Prepare a traditional format income statement for August. (A "Net operating loss" should be entered as a negative number.) Marwick's Planos, Incorporated Traditional Income statement For the Month of August Advertising Sales salaries and commissions Delivery of pianos Utilities Depreciation of sales facilities $948 per month $ 4,785 per month, plus 4% of sales $ 58 per piano sold $ 651 per month $ 5,844 per month Total selling expenses Administrative expenses: Executive salaries Insurance Clerical Depreciation of office equipment Total administrative expenses Total selling and administrative expenses Net operating income 0
Transcribed Image Text:Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,497 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 Depreciation of sales facilities Administrative: Executive salaries $ 13,559 per month Insurance $ 781 per month Clerical $ 2,533 per month, plus $44 per piano sold Depreciation of office equipment $ 918 per month During August, Marwick's Pianos, Incorporated, sold and delivered 64 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. Complete this question by entering your answers in the tabs below. Sales Cast of goods sold Gross margin Selling and administrative expenses: Selling expenses: Cost Formula Required 1 Required 2 Prepare a traditional format income statement for August. (A "Net operating loss" should be entered as a negative number.) Marwick's Planos, Incorporated Traditional Income statement For the Month of August Advertising Sales salaries and commissions Delivery of pianos Utilities Depreciation of sales facilities $948 per month $ 4,785 per month, plus 4% of sales $ 58 per piano sold $ 651 per month $ 5,844 per month Total selling expenses Administrative expenses: Executive salaries Insurance Clerical Depreciation of office equipment Total administrative expenses Total selling and administrative expenses Net operating income 0
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