Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,480 per unit and then sells them to retail customers
Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,480 per unit and then sells them to retail customers for an average price of $2,600 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 $946 per month $4,781 per month, plus 5% of sales $59 per piano sold $635 per month $5,050 per month $13,544 per month $717 per month $2,485 per month, plus $43 per piano sold $869 per month During August. Marwick's Pianos, Inc., sold and delivered 57 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 During August, Marwick's Pianos, Inc., sold and delivered 57 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a traditional format income statement for August. (A "Net operating loss" should be entered as a negative number.) Marwick's Pianos, Inc. Traditional Income Statement For the Month of August Selling and administrative expenses Alnut Marwick's Pianos, Inc. Traditional Income Statement For the Month of August Selling and administrative expenses: Selling expenses Total selling expenses Administrative expenses: Total selling expenses Administrative expenses: Total administrative expenses Total selling and administrative expenses Complete this question by entering your answers in the tabs below. Required 1 Required 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. (A "Net operating loss" should be entered as a negative number.) Marwick's Pianos, Inc. Contribution Format Income Statement For the Month of August Variable expenses: Total Per Piano Total variable expenses Contribution margin Fixed expenses: Total fixed expenses
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Lets start by calculating the necessary components for both the traditional and the contribution format income statements for Marwicks Pianos Inc for the month of August 1 Traditional Format Income St...See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started