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, Inc., purchases pianos from a large manufacturer for an average cost of $1,517 per unit and then sells them to retail customers for an average price of $2,100 each. The company's selling and administrative costs for a typical month are presented below: Cost Formula 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 $948 per month $4,824 per month, plus 6% of sales $62 $651 per month $4,944 per month per piano sold $13,507 per month $694 per month $2,538 per month, plus $44 per piano sold $880 per month During August, Marwick's Pianos, Inc., sold and delivered 56 pianos