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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 $3,000
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 $3,000 each. The average cost of an organ from the manufacturer is $1,508. The costs that the company incurs in a typical month are presented below:
Costs | Cost Formula |
Selling: | |
Advertising | $962 per month |
Delivery of organs | $57 per organ sold |
Sales salaries and commissions | $4,783 per month, plus 5% of sales |
Utilities | $639 per month |
Depreciation of sales facilities | $5,098 per month |
Administrative: | |
Executive salaries | $13,481 per month |
Depreciation of office equipment | $890 per month |
Clerical | $2,550 per month, plus $41 per organ sold |
Insurance | $718 per month |
During November, the company sold and delivered 60 organs. Prepare a traditional income statement for November. Prepare a contribution format income statement for November.
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