Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,503 per unit and then sells themto retail customers for an average price of $2,500 each. The company's selling and administrative costs for a typical month arepresented below:CostsSelling:AdvertisingSales salaries and commissionsDelivery of pianos to customersUtilitiesCost Formula$943 per month$4,780 per month, plus 5% of sales$62 per piano sold$638 per month$5,012 per monthDepreciation of sales facilitiesAdministrative:Executive salaries$13,474 per monthInsurance$688 per monthClerical$2,464 per month, plus $37 per$927 per monthDepreciation of office equipmentDuring August, Marwick's Pianos, Incorporated, sold and delivered 61 pianos.Lano soldRequired: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 downthrough contribution margin.

Income Statement is a financial statement that includes revenue earned and expenses incurred during…

Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,503 per unit and then sells them to retail customers for an average price of $2,500 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: Cost Formula $943 per month $4,780 per month, plus 5% of sales $62 per piano sold $638 per month $5,012 per month $13,474 per month $688 per month $2,464 per month, plus $37 per piano sold $927 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 61 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, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,503 per unit and then sells them to retail customers for an average price of $2,500 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: Cost Formula $943 per month $4,780 per month, plus 5% of sales $62 per piano sold $638 per month $5,012 per month $13,474 per month $688 per month $2,464 per month, plus $37 per piano sold $927 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 61 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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