APPLICATION PROBLEMS Problem 1- Contribution Format versus Traditional Income Statement (25 points) House of Organs Inc., purchases organs from a well-known manufacturer and sells them at the retail level. The organs sell, on the average, for $2,500 each. The average cost of an organ from the manufacturer is $1,500. The costs that the company incurs in a typical month are presented below: Costs Cost Formula Selling Advertising Delivery of orga n. Sales salaries and commission tilites.. Depreciation of sales facilities S950 per month $60 per organ solod $4,800 per month, plus 4% of sales $650 per month $5,000 per month Administrative: S13,500 per month Clerical$2,500 per month, plus $40 per organ sold Insurance... S700 per month During November, the company sold and delivered 60 organs. Required: 1. Prepare a traditional income statement for November. 2. Prepare a contribution format income statement for November. Show costs and revenues on both a total and a per unit basis down through contribution margin. 3. Refer to the income statement you prepared in (2) above. Why might it be misleading to show the fixed costs on a per unit basis