Marwicks Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,499 per unit and then sells them to retail customers for an average price of $2,900 each. The companys selling and administrative costs for a typical month are presented below:

Costs	Cost Formula
Selling:
Advertising	$956 per month
Sales salaries and commissions	$4,773 per month, plus 4% of sales
Delivery of pianos to customers	$60 per piano sold
Utilities	$640 per month
Depreciation of sales facilities	$4,972 per month
Administrative:
Executive salaries	$13,483 per month
Insurance	$712 per month
Clerical	$2,505 per month, plus $42 per piano sold
Depreciation of office equipment	$907 per month

During August, Marwicks Pianos, Incorporated, sold and delivered 60 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.

Prepare a traditional format income statement for August. (A "Net operating loss" should be entered as a negative number.)

Marwick's Pianos, Incorporated
Traditional Income Statement
For the Month of August
Sales		$174,000
Cost of goods sold		(89,940)
Gross margin		84,060
Selling and administrative expenses:
Selling expenses:
Advertising	$956
Sales salaries and commissions	11,733
Delivery of pianos	3,600
Utilities	640
Depreciation of sales facilities	4,972
Total selling expenses	21,901
Administrative expenses:
Executive salaries	13,483
Insurance	712
Clerical	5,025
Depreciation of office equipment	907

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
	Total	Per Piano
Sales	$174,000	$2,900
Variable expenses:
Clerical	2,520	42
Sales salaries and commissions	6,960
Delivery of pianos	3,600	60
Clerical
Cost of goods sold
Total variable expenses	13,080	102
Contribution margin
Fixed expenses:
Advertising
Sales salaries and commissions
Utilities
Depreciation of sales facilities
Executive salaries
Insurance
Clerical
Depreciation of office equipment