Question

Marwick's Planos, Inc., purchases planos from a large manufacturer for an average cost of $1,491 per unit and then sells them to retail customers for an average price of $2,600 each. The company's selling and administrative costs for a typical month are presented below: Cost Formula Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment $935 per month $4,791 per month, plus 5X of sales $63 per piano sold $648 per month $4,919 per month $13,500 per month $7e3 per month $2,452 per month, plus $40 per piano sold $913 per month During August, Marwick's Planos, Inc., sold and delivered 63 planos 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a traditional format income statement for August. (A "Net operating loss should be entered as a negative number) Marwick's Pianos, Inc. Traditional Income Statement For the Month of August Selling and administrative expenses Seling expenses: Total selling expenses Administrative expenses Total administrative expenses Total selling and administrative expenses

Answer 1

1638001 93933 698671 Merwick's Pianos, Inc Traditional Income Statement For the Month of August sales Revneue (2600*63) Cost of Goods Sold (1419*63) Gross Margin selling and Administrative Expenses Selling Expenses Advertising 935 Sales Salaries and Commission 12981 Delivary of Pianos 3969 Utilities 648 Depreciation of Sales facilities 49191 Total Selling Expenses 23452 Administrative Expenses Executive Salaries 13509 Insurance Expenses 703 Clerical 4972 Depreciaiton of Office Equipment 913 Total Administrative Expenses 20097 Total Selling and Administrative Expenses Net operating income 43549 263181

Merwick's Pianos, Inc Contribution Formate Income Statement For the Month of August Total Per Piano sales Revneue 163800 2600 Varaible Expenses Cost of Goods Sold 93933 1491 Sales Salaries and Commission 8190 Delivery of Pianos 3969 Clerical 2520 Total Variable Expenses 108612 1724 Contribution Margin 55188 876) Fixed Expenses Advertisements 935 Sales Salaries and Commission 4791 Utilities 648 Depreciaiton of Office Equipment 4919 Depreciaiton of sales Facilities 913 Execitive Slaries 13509 Insurance 703 Clarical 2452 Total Fixed Cost 28870 Net operating Income 26318 liries