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Marwicks Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,511 per unit and then sells them
Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a traditional format income
Administrative expenses: Total administrative expenses Total selling and administrative expenses
Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a contribution format income
Total fixed expenses
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Answer #1
Required 1 :
Marwick's Pianos, Inc.
Traditional Income Statement
For the month of August
Sales [ 65 * 3200 ] 208000
Cost of goods sold [ 65 * 1511 ] 98215
Gross margin 109785
Selling and administrative expenses :
Selling expenses :
Advertising 957
Sales salaries and commission [ 4773 + ( 5% * 208000 ) ] 15173
Delivery of pianos [ 65 * 58 ] 3770
Utilities 663
Depreciation of sales facilities 4968
Total selling expenses 25531
Administrative expenses:
Executive salaries 13568
Insurance 693
Clerical [ 2491 + ( 65 * 36 ) ] 4831
Depreciation of office equipment 915
Total administrative expenses 20007
Total selling and administrative expenses 45538
Net operating income 64247
Required 2 :
Marwick's Pianos, Inc.
Contribution format Income Statement
For the month of August
Total Per piano
Sales 208000 3200
Variable expenses :
Cost of goods sold 98215 1511
Sales commissions [ 208000 * 5% ] 10400 160
Delivery of pianos 3770 58
Clerical 2340 36
Total variable expenses 114725 1765
Contribution margin 93275 1435
Fixed expenses :
Advertising 957
Sales salaries 4773
Utilities 663
Depreciation of sales facilities 4968
Executive salaries 13568
Insurance 693
Clerical 2491
Depreciation of office equipment 915
Total fixed expenses 29028
Net operating income 64247
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