Mozart Pianos, Inc., purchases pianos from a well-known manufacturer and resells them at its retail store. Needed information for this assignment is given below. Note that Sales Salaries and Commissions and Clerical costs are mixed costs: they will be divided between the variable and fixed sections of the contribution format income statement. MOZART PIANOS, INC. Average sales price of each piano $ 4,000 Number of pianos sold and delivered in March 40 Costs Cost Formula Average cost of each piano (cost of goods sold) $ 2,600 Selling: Advertising $1,000 per month Delivery of pianos $ 80 per piano sold Sales salaries and commissions Utilities $5,000 per month plus 5% of sales dollars $ 650 per month Depreciation of sales facilities $5,000 per month 3 Administrative: 1 Executive salaries $ 14,000 per month D Depreciation of office equipment $ 900 per month 3 Clerical $2,000 per month plus $25 per piano sold Insurance $ 700 per month 2 7 8 9 -0 31 32 per piano In this assignment you analyze the costs of a piano retailer. Using the given data, prepare a traditional income statement and a contribution format income statement for March. MOZART PIANOS, INC. Traditional Income Statement For the Month Ended March 31 Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses: Advertising Delivery of pianos Sales salaries & commissions Utilities Depreciation of sales facilities Total selling expenses Administrative expenses: Executive salaries Depreciation of office equipment Clerical Insurance Total administrative expenses Total selling and administrative expenses Net operating income 3 1 D 5 7 MOZART PIANOS, INC. Contribution Format Income Statement For the Month Ended March 31 Total Sales Variable expenses: Cost of goods sold Delivery of pianos Sales commissions Clerical Total variable expenses Contribution margin Fixed expenses: Advertising Sales salaries Utilities Depreciation of sales facilities Executive salaries Depreciation of office equipment Clerical Insurance Total fixed expenses Net operating income Per Piano