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House of Organs, Inc., purchases organs from a well-known manufacturer and sells them at the retail level. The organs sell, on the average, for $3,300
House of Organs, Inc., purchases organs from a well-known manufacturer and sells them at the retail level. The organs sell, on the average, for $3,300 each. The average cost of an organ from the manufacturer is $1,491. The costs that the company incurs in a typical month are presented below: |
Costs | Cost Formula |
Selling: | |
Advertising | $951 per month |
Delivery of organs | $61 per organ sold |
Sales salaries and commissions | $4,800 per month, plus 5% of sales |
Utilities | $667 per month |
Depreciation of sales facilities | $4,956 per month |
Administrative: | |
Executive salaries | $13,559 per month |
Depreciation of office equipment | $924 per month |
Clerical | $2,528 per month, plus $40 per organ sold |
Insurance | $693 per month |
During November, the company sold and delivered 56 organs. |
Required: | |
1. | Prepare a traditional income statement for November.
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