Marwick s Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $ 1

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Question:

Marwicks Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $ $1, 499$ per unit and then sells them to retail customers for an average price of $ $2, 300$ each. The companys selling and administrative costs for a typical month are presented below:

Costs Cost Formula

Selling:

Advertising $ $936$ per month

Sales salaries and commissions $ $4, 781$ per month, plus $3 %$ of sales

Delivery of pianos to customers $ $60$ per piano sold

Utilities $ $634$ per month

Depreciation of sales facilities $ $5, 075$ per month

Administrative:

Executive salaries $ $13, 550$ per month

Insurance $ $697$ per month

Clerical $ $2, 529$ per month, plus $ $37$ per piano sold

Depreciation of office equipment $ $851$ per month

During August, Marwicks Pianos, Incorporated, sold and delivered $63$ 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 per unit basis down through contribution margin.