Marwick\'s Pianos, Inc. purchases pianos from a large manufacturer for an averag

Question

Marwick's Pianos, Inc. purchases pianos from a large manufacturer for an average cost of $2,450 per unit and then sells them to retail customers for an average price of $3,125 each. The company's selling and administrative costs for a typical month are presented below Cost Formula Advertising Sales salaries and commissions Delivery of pianos to custoners vtilities Depreciation of sales facilities $700 per month 950 per month, plus 8t of sales $30 per piano sold $350 per month $800 per month Adninistrativer Executive salaries Insurance Clerical Depreciation of office equipment $2,500 per month $400 per month $1,000 per month, plus $20 per piano sold 300 per month 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 Answer is not complete. Complete this question by entering your answers in the tabs below

Explanation / Answer

1.) Traditional income statement

2)    Contribution income statement

Sales ($3125*40) 125000 cost of goods sold ($2450 * 40) 98000 Gross margin 27000 Selling and administrative expenses: Selling expense Advertising 700 Sales salaries and commission 10950 Delivery of pianos to customers 1200 Utilities 350 Depreciation of sales facilities 800 Total selling expenses 14000 Administrative expenses Executive salaries 2500 Insurance 400 Clerical 1800 Depreciation of office equipment 300 Total Administrative expenses 5000 Total selling and administrative expenses 19000 Net operating income $8000

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.