121 Traditional and Contribution Format Income Statements LO16 Marwicks Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $2,450 per unit and then sells them to retail customers for an average price of $3,125 each. The companys selling and administrative costs for a typical month are presented below: Costs Cost Formula Selling: Advertising $700 per month Sales salaries and commissions $950 per month, plus 8% of sales Delivery of pianos to customers $30 per piano sold Utilities $350 per month Depreciation of sales facilities $800 per month Administrative: Executive salaries $2,500 per month Insurance $400 per month Clerical $1,000 per month, plus $20 per piano sold Depreciation of office equipment $300 per month page 57 During August, Marwicks Pianos, Inc., sold and delivered 40 pianos. Required: Prepare a traditional format income statement for August. 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. Refer to the income statement you prepared in (2) above. Why might it be misleading to show the fixed costs on a per unit basis