Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,493 per unit and then sells them to retail customers for an average price of $3,000 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 $950 per month $4,794 per month, plus 6% of sales $58 per piano sold $ 648 per month $5,051 per month $13,495 per month $696 per month $2,476 per month, plus $43 per piano sold $ 857 per month During August, Marwick's Pianos, Inc., sold and delivered 58 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. $ 174,000 Marwick's Pianos, Inc. Traditional Income Statement For the Month of August Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses: Advertising $ 950 Sales salaries and commissions 15,234 Delivery of pianos 3,364 Utilities 648 Depreciation of sales facilities 1 5 .051 25,247 Total selling expenses Administrative expenses: Executive salaries Insurance Clerical Depreciation of office equipment 13,495 696 4,970 857 Total administrative expenses 20,018 45,265 Total selling and administrative expenses Net operating income Marwick's Pianos, Inc. Contribution Format Income Statement For the Month of August Total Sales $ 174,000 Variable expenses: Sales salaries and commissions 15,234 Per Piano $ 3,000 263 Cost of goods sold Delivery of pianos Clerical 3,364 58 Total variable expenses 18,598 364 Contribution margin Fixed expenses: Advertising Depreciation of sales facilities Utilities Depreciation of office equipment Executive salaries Insurance Clerical 950 5,051 648 857 13,495 696 2,476 24,173 Total fixed expenses Net operating income