House of Pianos, Inc. purchases pianos from a well-known manufacturer and sells them at the retail level. The pianos sell, on the average, for $2,600 each. The average cost of apiano from the manufacturer is $1,750.

House of Pianos, Inc. has always kept careful records of its costs. The costs that the company incurs in a typical month are presented below:

Costs

Cost Formula

Selling:

Advertising

$1,650.00

per month

Delivery of Pianos

$80.00

per piano sold

Sales Salaries and Commissions

$3,500.00

per month, plus 3% of sales

Utilities

$800.00

per month

Depreciation of Sales Facilities

$4,600.00

per month

Administrative:

Executive Salaries

$15,500.00

per month

Depreciation of Office Equipment

$700.00

per month

Clerical

$2,900.00

per month, plus $50 per piano sold

Insurance

$750.00

per month

During November, the company sold and delivered 95 pianos.

1. Prepare a Contribution Format income statement for November with costs organized by behaviour. Show costs and revenues on both a total and a per unit basis down through contribution margin. - 12 marks