Question: marwicks pianos inc purchases pianos from a large manufacturer for...
Marwick’s Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,504 per unit and then sells them to retail customers for an average price of $2,400 each. The company’s selling and administrative costs for a typical month are presented below:
|Advertising||$||961 per month|
|Sales salaries and commissions||$||4,818 per month, plus 3% of sales|
|Delivery of pianos to customers||$||57 per piano sold|
|Utilities||$||647 per month|
|Depreciation of sales facilities||$||4,958 per month|
|Executive salaries||$||13,511 per month|
|Insurance||$||690 per month|
|Clerical||$||2,463 per month, plus $35 per piano sold|
|Depreciation of office equipment||$||877 per month|
During August, Marwick’s Pianos, Inc., sold and delivered 56 pianos.
1. Prepare a traditional format income statement for
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.