Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Chapter 1, Problem 21P
Traditional and Contribution Format Income Statements.
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:
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.
3. Refer to the income statement you prepared in (2) above. Why might it be misleading to show the fixed costs on a per unit basis?
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and its total fixed expenses were $35,300.
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Marwick's Planos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,508 per unit and then sells them
to retail customers for an average price of $3,400 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:
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$643 per month
$4,959 per month
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Insurance
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During August, Marwick's Pianos, Incorporated, sold and delivered 65 pianos.
$13,582 per month
$715 per month
$2,526 per month, plus $42 per piano sold
$892 per month
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…
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Required:
a. Construct the company's contribution format income statement for April.
b. Redo the company's contribution format income statement assuming that the company sells 1,900 units.
Complete this question by entering your answers in the tabs below.
Required a Required b
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Chapter 1 Solutions
Introduction To Managerial Accounting
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Ch. 1 - What is the difference between a traditional...Ch. 1 - Prob. 12QCh. 1 - Define the following terms: differential cost,...Ch. 1 - Only variable costs can be differential costs. Do...Ch. 1 - Prob. 1AECh. 1 - This Excel worksheet form is to be used to...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Prob. 4F15Ch. 1 - Prob. 5F15Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Prob. 8F15Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Martinez Company’s relevant range of production is...Ch. 1 - Prob. 15F15Ch. 1 - Identifying Direct and Indirect Costs Northwest...Ch. 1 - Prob. 2ECh. 1 - Classifying Costs as Product or Period Costs...Ch. 1 - Prob. 4ECh. 1 - Prob. 5ECh. 1 - Traditional and Contribution Format Income...Ch. 1 - Direct and Indirect CostsKubin Company’s relevant...Ch. 1 - Product Costs and Period Costs; Variable and Fixed...Ch. 1 - Fixed, Variable, and Mixed Costs Refer to the data...Ch. 1 - Differential Costs and Sunk Costs Refer to the...Ch. 1 - Cost Behavior; Contribution Format Income...Ch. 1 - Product and Period Cost Flows The Devon Motor...Ch. 1 - Prob. 13ECh. 1 - Cost Classification Wollogong Group Ltd. of New...Ch. 1 - Traditional and Contribution Format Income...Ch. 1 - Cost Classifications for Decision Making Warner...Ch. 1 - Classifying Variable and Fixed Costs and Product...Ch. 1 - PROBLEM 1—18 Direct and Indirect Costs; Variable...Ch. 1 - Traditional and Contribution Format Income...Ch. 1 - Variable and Fixed Costs; Subtleties of Direct and...Ch. 1 - Traditional and Contribution Format Income...Ch. 1 - Cost Terminology; Contribution Format Income...Ch. 1 - Cost Classification Listed below are costs found...Ch. 1 - Different Cost Classifications for Different...Ch. 1 - Traditional and Contribution Format Income...
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