Format Income Statements L01-6 Marwick's 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 company's 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 5800 per month Administrative: Executive salaries $2,500 per month Insurance S400 per month Clerical S1,000 per month, plus S20 per piano sold Depreciation of office equipment S300 per month Page 34 During August. Marwick's Pianos. Inc., sold and delivered 40 pianos. 2. Marwick's Pianos, Inc. Contribution Format Income Statement For the Month of August Total Per Piano $ Marwick's Pianos, Inc. Traditional Income Statement For the Month of August Sales (pianos x $ per piano)............ Cost of goods sold - planos x $ per piano). Gross margin... Selling and administrative expenses: Selling expenses: Advertising Sales salaries and commissions [$ + % x $ Delivery of pianos L planos x $___ per piano) Utilities Depreciation of sales facilities Total selling expenses. Administrative expenses: Executive salaries ......... Insurance...... Clerical IS _+pianos $_ per piano) Depreciation of office equipment.... Total administrative expenses..... Total selling and administrative expenses.......... Net operating income... Sales (pianos x $ per piano). Variable expenses: Cost of goods sold Lpianos x $ per piano) Sales commissions % $ Delivery of planos pianos x $_ per piano) Clerical pianos x 5 per piano) Total variable expenses.. Contribution margin. Fixed expenses: Advertising Sales salaries Utilities. Depreciation of sales facilities Executive salaries. Insurance.. Clerical Depreciation of office equipment Total fixed expenses Net operating income u 3