Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,506 per...

 

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Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,506 per unit and then sells them to retail customers for an average price of $2,400 each. The company's selling and administrative costs for a typical month are presented below: 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 Cost Formula $ 933 per month $ 4,824 per month, plus 4% of sales $ 58 per piano sold $ 630 per month $ 5,054 per month $ 13,584 per month $ 681 per month $ 2,488 per month, plus $37 per piano sold $ 884 per month During August, Marwick's Pianos, Incorporated, sold and delivered 55 pianos. 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. Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,506 per unit and then sells them to retail customers for an average price of $2,400 each. The company's selling and administrative costs for a typical month are presented below: 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 Cost Formula $ 933 per month $ 4,824 per month, plus 4% of sales $ 58 per piano sold $ 630 per month $ 5,054 per month $ 13,584 per month $ 681 per month $ 2,488 per month, plus $37 per piano sold $ 884 per month During August, Marwick's Pianos, Incorporated, sold and delivered 55 pianos. 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.