PROBLEM 2-19 Contribution Format versus Traditional Income Statement [LO2-6) Marwick's Pianos, Inc., purchases pianos from a large manufacturer and sells them at the retail level. The pianos cost, on the average, $2,450 each from the manufacturer. Marwick's Pianos, Inc. sells the pianos to its customers at an average price of $3,125 each. The selling and administrative costs that the company incurs in a typical month are presented below: Costs Cost Formula Selling: $700 per month Advertising Sales salaries and commissions . . . . . $950 per month, plus 8% of sales Delivery of pianos to customers ...$30 per piano sold $350 per month $800 per month Depreciation of sales facilities . .. Administrative: $2,500 per month Clerical . . . . . . . . . . . . . . . . . . . . . .. $1,000 per month, plus $20 per piano sold Depreciation of office equipment. . . .. $300 per month During August, Marwick's Pianos, Inc., sold and delivered 40 pianos. Required: 1. Prepare an income statement for Marwick's Pianos, Inc., for August. Use the traditional for- 2. Redo (1) above, this time using the contribution format, with costs organized by behavior 3. Refer to the income statement you prepared in (2) above. Why might it be misleading to show mat, with costs organized by function Show costs and revenues on both a total and a per unit basis down through contribution margin the fixed costs on a per unit basis