Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $$2,450$ per unit and then sells $m$ to retail customers for an average price of $$3,125$ each. The company's selling and administrative costs for a typical month are sented below:

$\backslash$table$[[$Costs$,$Cost Formula$],[$Selling:$,],[$Advertising$,$$$700$ per month$],[$Sales salaries and commissions,$$950$ per month, plus $8\%$ of sales$],[$Delivery of pianos to customers,$$30$ per piano sold$],[$Utilities$,$$$350$ per month$],[$Depreciation of sales facilities,$$800$ per month$],[$Administrative:$,$$$2,500$ per month$],[$Executive salaries,$$400$ per month$],[$Insurance$,$$$1,000$ per month, plus $$20$ per piano sold$],[$Clerical$,$$$300$ per month$],[$Depreciation of office equipment,$]]$

uring August, Marwick's Pianos, Inc., sold and delivered $40$ pianos.

Page $57$

Problem $1-21$

Marwick's Pianos, Inc.

$1$

Traditional Income Statement

For the Month of August

Sales $(40$ pianos $$$$3125$ per piano$)$

$$125,000$

Cost of goods sold

pianos $$$$2450$ per piano$)$

Gross margin

$\frac{98000}{27,000}$

Selling and administrative expenses:

Selling expenses:

Advertising

$\backslash$table$[[$$$\frac{700}{10,950}$