Marwicks Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,513 per unit and then sells them to retail customers for an average price of $2,400 each. The companys selling and administrative costs for a typical month are presented below:

Costs	Cost Formula
Selling:
Advertising	$	949 per month
Sales salaries and commissions	$	4,797 per month, plus 4% of sales
Delivery of pianos to customers	$	60 per piano sold
Utilities	$	643 per month
Depreciation of sales facilities	$	4,904 per month
Administrative:
Executive salaries	$	13,492 per month
Insurance	$	708 per month
Clerical	$	2,503 per month, plus $37 per piano sold
Depreciation of office equipment	$	907 per month

During August, Marwicks Pianos, Inc., sold and delivered 61 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.

• Required 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. (A "Net operating loss" should be entered as a negative number.)

Marwick's Pianos, Inc.
Contribution Format Income Statement
For the Month of August
	Total	Per Piano
Variable expenses:
Total variable expenses
Contribution margin
Fixed expenses:
Total fixed expenses