Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6] Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,513 per unit and then sells them to retail customers for an average price of $2,200 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 $960 per month $4,810 per month, plus 48 of sales $62 per piano sold $633 per month $4,992 per month $13,526 per month $709 per month $2,521 per month, plus $45 per piano sold $872 per month During August, Marwick's Planos, Inc., sold and delivered 56 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 Marwick's Pianos, Inc. Traditional Income Statement For the Month of August Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses: Advertising Sales salaries and commissions Utilities Delivery of pianos Depreciation of sales facilities Total selling expenses Administrative expenses: Executive salaries Insurance Clerical Depreciation of office equipment 0 Total administrative expenses Total selling and administrative expenses Net operating income 0 Marwick's Pianos, Inc. Contribution Format Income Statement For the Month of August Total Per Piano Variable expenses: 0 0 Total variable expenses Contribution margin Fixed expenses: Total fixed expenses 0