Marwicks Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,487 per unit and then sells them to retail customers for an average price of $2,100 each.

The companys selling and administrative costs for a typical month are presented below:

Costs

Cost Formula Selling:

Advertising $ 935 per month

Sales salaries and commissions $ 4,800 per month, plus 6% of sales

Delivery of pianos to customers: $ 60 per piano sold

Utilities $ 656 per month

Depreciation of sales facilities $ 5,028 per month

Administrative:

Executive salaries $ 13,418 per month Insurance $ 682 per month

Clerical $ 2,498 per month, plus $39 per piano sold

Depreciation of office equipment $ 878 per month

During August, Marwicks Pianos, Inc., sold and delivered 56 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.