Marwicks Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,493 per unit and then sells them to retail customers for an average price of $3,000 each. The companys selling and administrative costs for a typical month are presented below:

Costs

Cost Formula

Selling:

Advertising

$

934 per month

Sales salaries and commissions

$

4,791 per month, plus 5% of sales

Delivery of pianos to customers

$

57 per piano sold

Utilities

$

664 per month

Depreciation of sales facilities

$

4,933 per month

Administrative:

Executive salaries

$

13,583 per month

Insurance

$

694 per month

Clerical

$

2,472 per month, plus $36 per piano sold

Depreciation of office equipment

$

920 per month

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
Sales	$168,000	$3,000
Variable expenses:
Cost of goods sold	83,608	1,493
Sales salaries and commissions	8,400	150
Delivery of pianos	2,160	36
Clerical	3,192	57
Total variable expenses	97,360	1,736
Contribution margin	$70,640	$1,264
Fixed expenses:
Advertising	934
Sales salaries and commissions
Utilities	664
Depreciation of office equipment	920
Depreciation of sales facilities	4,933
Insurance	694
Clerical
Total fixed expenses	8,145
Net operating income