Question
Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,512 per unit and then sells them to retail customers
Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,512 per unit and then sells them to retail customers for an average price of $2,300 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment Cost Formula $961 per month $4,819 per month, plus 5% of sales $58 per piano sold $647 per month $4,944 per month $13,597 per month $720 per month $2,498 per month, plus $41 per piano sold $857 per month During August, Marwick's Pianos, Incorporated, sold and delivered 58 pianos. 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, Incorporated Contribution Format Income Statement For the Month of August Variable expenses: Clerical Total variable expenses Contribution margin Fixed expenses: Total Per Piano 0 0 0 Total fixed expenses
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