Question
Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,515 per unit and then sells them to retail customers for
Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,515 per unit and then sells them to retail customers for an average price of $3,200 each. The company's selling and administrative costs for a typical month are presented below:
CostsCost FormulaSelling:Advertising$935 per monthSales salaries and commissions$4,787 per month, plus 3% of salesDelivery of pianos to customers$61 per piano soldUtilities$645 per monthDepreciation of sales facilities$5,038 per monthAdministrative:Executive salaries$13,547 per monthInsurance$708 per monthClerical$2,507 per month, plus $45 per piano soldDepreciation of office equipment$902 per month
During August, Marwick's Pianos, Inc., sold and delivered 57 pianos.
Required:
1. need traditional format income statement for August.
2. need contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down through contribution margin.
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