Problem 1-19A Contribution Format versus Traditional Income Statement [LO1-6] Marwicks Pianos, Inc., purchases pianos from a large manufacturer and sells them at the retail level. The pianos cost, on the average, $1,517 each from the manufacturer. Marwicks Pianos, Inc., sells the pianos to its customers at an average price of $2,500 each. The selling and administrative costs that the company incurs in a typical month are presented below: Costs Cost Formula Selling: Advertising $954 per month Sales salaries and commissions $4,775 per month, plus 4% of sales Delivery of pianos to customers $58 per piano sold Utilities $649 per month Depreciation of sales facilities $4,969 per month Administrative: Executive salaries $13,527 per month Insurance $702 per month Clerical $2,492 per month, plus $41 per piano sold Depreciation of office equipment $854 per month During August, Marwicks Pianos, Inc., sold and delivered 60 pianos.

Required: 1. Prepare an income statement for Marwicks Pianos, Inc., for August. Use the traditional format, with costs organized by function. (A "Net operating loss" should be entered as a negative number.)

part 2 2. Prepare an income statement for Marwicks Pianos, Inc., for August, this time using the contribution format, with costs organized by behavior. Show costs and revenues on both a total and a per unit basis down through contribution margin. (A "Net operating loss" should be entered as a negative number.)