Help Save & Exit Submit Check my work Marwick\'s Pianos, Inc., purchases custome

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Help Save & Exit Submit Check my work Marwick's Pianos, Inc., purchases customers for an average price of $3,125 each. The company's selling below pianos from a large manufacturer for an average cost of $2.450 per unit and then sells them to retail and administrative costs for a typical month are presented Selling tising $700 per month $950 permonth, plus 8t of sales $30 per piano sold $350 per month $800 per month Delivery of pianos to customers Depreciation of sales facilities $2,500 per month $400 per nonth $1,000 per month, plus $20 per piano sold $300 per month Clerical During August, Marwick's Pianos, Inc., sold and delivered 40 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 K Prev 2 of 3 Next

Explanation / Answer

Traditional Income Statement Sales 125000 =40*3125 Cost of goods sold 98000 =40*2450 Gross margin 27000 Selling and administrative expenses: Selling expenses: Advertising 700 Sales salaries and commissions 10950 =950+(125000*8%) Utilities 350 Depreciation of sales facilities 800 Delivery of pianos 1200 =40*30 Total selling expenses 14000 Administrative expenses: Insurance 400 Executive salaries 2500 Depreciation of office equipment 300 Clerical 1800 =1000+(40*20) Total administrative expenses 5000 Total selling and administrative expenses 19000 Net operating income 8000 2 Total Per piano Sales 125000 3125 Variable expenses: Clerical 800 20 Sales commissions 10000 250 Delivery of pianos 1200 30 Cost of goods sold 98000 2450 Total variable expenses 110000 2750 Contribution margin 15000 375 Fixed expenses: Advertising 700 Depreciation of sales facilities 800 Utilities 350 Executive salaries 2500 Insurance 400 Depreciation of office equipment 300 Clerical 1000 Sales salaries 950 Total fixed expenses 7000 Net operating income 8000

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