Question

8 customers for an average price of $2,400 each. The company's selling and administrative costs for a typical month are presented below 962 per month 58 per piano sold 5, 082 per month $13,507 per month 2,494 per month, plas $41 per piano sold Delivery of pianos to eustoners veilities Depreciation of sales faoilities Print Adminiatrat $925 per month 2 Prepare a contibution format ncome statement for August. Show costs and revenues on both a total and a per unit basis down < Prev 8 of Next

Answer 1

Marwick’s Pianos, Inc.,
Income Statement for the month of August, XXXX
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Sales Revenue (65 pianos x $2,400)		$ 156,000.00
Less : Cost of goods sold (65*1513)		$    98,345.00
Gross Profit		$    57,655.00
Less : Operating expenses
Selling expenses
Advertising	$          962.00
Sales Salaries & Comm.
$4824 + ($156,000 x 4%)	$    11,064.00
Delivery (65 x $58)	$      3,770.00
Utilities	$          665.00
Depr. of Sales facilities	$      5,082.00
Total Selling expenses		$    21,543.00
Administrative expenses
Executive Salaries	$    13,507.00
Insurance	$          684.00
Clerical $2,494 +(65x$41)	$      5,159.00
Depr. of office equipment	$          925.00
Total administrative expenses		$    20,275.00
Net operating Income		$    15,837.00
Marwick’s Pianos, Inc.,
Income Statement for the month of August, XXXX
______________________________________________________
Total      Per Unit	Total	Per Unit
Sales Revenue (65 pianos x $2,400)	$ 156,000.00	$      2,400.00
Less : Variable expenses:
Cost of goods sold (65*1513)	$    98,345.00	$      1,513.00
Sales Commission ($156,000 x 4%)	$      6,240.00	$            96.00
Delivery (65 x $58)	$      3,770.00	$            58.00
Clerical (65x$41)	$      2,665.00	$            41.00
Total variable expenses	$ 111,020.00	$      1,708.00
Contribution margin	$    44,980.00	$          692.00
Less : Fixed expenses
Advertising	$          962.00	$            14.80
Sales Salaries	$      4,824.00	$            74.22
Utilities	$          665.00	$            10.23
Depr. of Sales facilities	$      5,082.00	$            78.18
Executive Salaries	$    13,507.00	$          207.80
Insurance	$          684.00	$            10.52
Clerical	$      2,494.00	$            38.37
Depr. of office equipment	$          925.00	$            14.23
Total Fixed expenses	$    29,143.00	$          448.35
Net operating Income	$    15,837.00	$          243.65