Problem $1-21($Algo$)$ Traditional and Contribution Format Income Statements $[$LO$1-6]$

Marwick$$s Pianos, Incorporated, purchases pianos from a manufacturer for an average cost of $$1,501$ per unit and then sells them to retail customers for an average price of $$2,700$ each. The company$$s selling and administrative costs for a typical month are presented below:

Costs Cost Formula

Selling:

Advertising $$959$ per month

Sales salaries and commissions $$4,828$ per month, plus $5\%$ of sales

Delivery of pianos to customers $$59$ per piano sold

Utilities $$643$ per month

Depreciation of sales facilities $$5,008$ per month

Administrative:

Executive salaries $$13,486$ per month

Insurance $$697$ per month

Clerical $$2,464$ per month, plus $$36$ per piano sold

Depreciation of office equipment $$897$ per month

During August, Marwick$$s Pianos, Incorporated, sold and delivered $59$ 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.