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Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $ 2 , 4 5 0 per unit and then sells

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:
\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
9800027,000
Selling and administrative expenses:
Selling expenses:
Advertising
\table[[$70010,950
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