Marwicks Pianos, Incorporated, purchases pianos from a manufacturer for an average cost of $ per unit and then sells them to retail customers for an average price of $ each. The companys selling and administrative costs for a typical month are presented below:
Costs Cost Formula
Selling:
Advertising $ per month
Sales salaries and commissions $ per month, plus of sales
Delivery of pianos to customers $ per piano sold
Utilities $ per month
Depreciation of sales facilities $ per month
Administrative:
Executive salaries $ per month
Insurance $ per month
Clerical $ per month, plus $ per piano sold
Depreciation of office equipment $ per month
During August, Marwicks Pianos, Incorporated, sold and delivered pianos.
Required:
Prepare a traditional format income statement for August.
Prepare a contribution format income statement for August. Show costs and revenues on both a total and a perunit basis down through contribution margin.
