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I can't figure out what I did wrong... Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,491 per unit
I can't figure out what I did wrong...
Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,491 per unit and then sells them to retail customers for an average price of $3,100 each. The company's selling and administrative costs for a typical month are presented below: Cost Formula 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 $955 per month $4,820 per month, plus 5% of sales $60 per piano sold $640 per month $4,930 per month $13,427 per month $693 per month $2,524 per month, plus $37 per piano sold $885 per month During August, Marwick's Pianos, Inc., sold and delivered 65 pianos. Required: 1. Prepare a traditional format income statement for August. 2. 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. For the Month of August $ 201,500 96,915 104,585 Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses: Advertising Sales salaries and commissions Delivery of pianos Utilities Depreciation of sales facilities $ 955 10,316 3,900 640 4,930 20,741 Total selling expenses Administrative expenses: Executive salaries Insurance Clerical Depreciation of office equipment 13,427 693 95,793 885 110,798 Total administrative expenses Total selling and administrative expenses Net operating loss 131,539 $ 26,954Step by Step Solution
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