$5$

Marwick's Pianos, Incorporated, purchases pianos from a 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 company's selling and administrative costs for a typical month are presented below:

$5$

points

Costs

Selling:

Advertising

Sales salaries and commissions

Delivery of pianos to customers

Utilities

Depreciation of sales facilities

Administrative:

Executive salaries

Insurance

Clerical

Depreciation of office equipment

Cost Formula

$$700$ per month

$$950$ per month, plus $8\%$ of sales

$$30$ per piano sold

$$350$ per month

$$800$ per month

$$2,500$ per month

$$400$ per month

$$1,000$ per month, plus $$20$ per piano sold

$$300$ per month

During August, Marwick's Pianos, Incorporated, 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.

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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