Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Marwicks Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,488 per unit and then sells them to retail customers for

Marwicks Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,488 per unit and then sells them to retail customers for an average price of $2,600 each. The companys selling and administrative costs for a typical month are presented below: Costs Cost Formula Selling: Advertising $ 947 per month Sales salaries and commissions $ 4,815 per month, plus 4% of sales Delivery of pianos to customers $ 59 per piano sold Utilities $ 638 per month Depreciation of sales facilities $ 5,098 per month Administrative: Executive salaries $ 13,559 per month Insurance $ 719 per month Clerical $ 2,512 per month, plus $36 per piano sold Depreciation of office equipment $ 862 per month During August, Marwicks Pianos, Inc., sold and delivered 58 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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Frequently Asked Questions In International Standards On Auditing

Authors: Steven Collings

1st Edition

1118765419, 978-1118765418

More Books

Students also viewed these Accounting questions

Question

How will these issues affect the grade levels you will teach?

Answered: 1 week ago