Question

19 Problem 1-21 Traditional and Contribution Format Income Statements (LO1-6) 10 points Marwick's Planos, Inc., purchases planos from a large manufacturer for an average cost of $1485 per unit and then sells them to retail customers for an average price of $2.900 each. The company's selling and administrative costs for a typical month are presented below: Cast Formula eBook print of sales 5939 per month $4,786 month, plus $60 per piano sold $662 per month $5,007 per month References Costs Selling Advertising sales salaries and commissions Delivery of plans to customers Utilities Depreciation of sales facilities Administrative Executive salaries Insurance Clerical Depreciation of office equipment $13.1 per oth 3693 per month $2,548 per month, plus 59 per piano sold SORT per month. During August. Marwick's Planos, Inc. sold and delivered 57 planos s on 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 through contribution margin

I don't understand why ky contribution margin is wrong

Answer 1

Ques 1
	Traditional Income statement
	Sales		165300	2900*57
	Cost of goods sold		84645	1485*57
	Gross Margin		80655
	Selling and administrative expenses
	Advertising	939
	Sales salaries and commissions	14704		4786+0.06*165300
	Delivery of pianos to customers	3420		60*57
	Utilities	662
	Depreciation of sales facilities	5007
	total selling expenses	24732
	Administrative expenses
	Executive salaries	13410
	Insurance	693
	Clerical	4771		2548+39*57
	Depreciation of office equipment	947
	Total Administrative expenses	19821
	Total selling & admn expenses		44553
	Net Operating income		36102
Ques 2	Contribution format Income statement
		Total	Per Piano
	Sales	165300	2900
	Variable expenses
	Sales salaries and commissions	9918	174	165300*0.06
	Delivery of pianos to customers	3420	60
	Clerical	2223	39	39*57
	Cost of goods sold	84645	1485
	total variable expenses	100206	1758
	Contribution margin	65094	1142
	Fixed expenses
	Advertising	939
	Sales salaries and commissions	4786
	Utilities	662
	Depreciation of sales facilities	5007
	Depreciation of office equipment	947
	Executive salaries	13410
	Insurance	693
	Clerical	2548
	total fixed expenses	28992
	Net operating income	36102