Question

question number 2 please

Problem 1-21 Traditional and Contribution Format Income Statements [LO1-6] Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,489 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: Cost Formula Costs Selling: Advertising $940 per month $4,809 per month, plus 3% of sales $59 per piano sold $659 per month $5,057 per month Sales salaries and commissions Delivery of pianos to customers Utilities Depreciation of sales facilities Administrative: $13,406 per month $710 per month $2,489 per month, plus $39 per piano sold $870 per month Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Ic., 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.

Answer 1

	Per unit	Total
Sales revenue	2500	152500
Less: Variable expense
Cost of goods sold	1489	90829
Sales salaries and commission	75	4575
Delivery of pions to customer	59	3599
Clerical	39	2379
Total Variable Expense	1662	101382
Contribution margin	838	51118
Less: Fixed expense
Advertising		940
Sales and salaries commission		4809
Utilities		659
Depreciation of sales facilities		5057
Executive salaries		13406
Insurance		710
Clerical		2489
Depreciation of office equipment		870
Total Fixed cost		28940
Net income (loss)		22178

Contribution margin income statement