Marwicks Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,507 per unit and then sells them to retail customers for an average price of $3,100 each The companys selling and administrative costs for a typical month are presented below Costs Cost Formula Selling Advertising $ 954 per month Sales salaries and commissions $ 4,810 per month, plus 6 of sales Delivery of pianos to customers $ 57 per piano sold Utilities $ 659 per month Depreciation of sales facilities $ 4,954 per month Administrative Executive salaries $ 13,508 per month Insurance $ 690 per month Clerical $ 2,490 per month, plus $37 per piano sold Depreciation of office equipment $ 944 per month During August, Marwicks Pianos, Incorporated, sold and delivered 59 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 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 )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 10, 2024

Marwicks Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,507 per unit and then sells them to retail customers for

Marwicks Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,507 per unit and then sells them to retail customers for an average price of $3,100 each. The companys selling and administrative costs for a typical month are presented below:

Costs	Cost Formula
Selling:
Advertising	$ 954	per month
Sales salaries and commissions	$ 4,810	per month, plus 6% of sales
Delivery of pianos to customers	$ 57	per piano sold
Utilities	$ 659	per month
Depreciation of sales facilities	$ 4,954	per month
Administrative:
Executive salaries	$ 13,508	per month
Insurance	$ 690	per month
Clerical	$ 2,490	per month, plus $37 per piano sold
Depreciation of office equipment	$ 944	per month

During August, Marwicks Pianos, Incorporated, sold and delivered 59 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. image text in transcribed

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.)