Question

Please help! I always to thumbs up, thanks!

Marwick's Pianos, Inc., purchases pianos from a large manufacturer and sells them at the retail level. The pianos cost, on the average, $1,480 each from the manufacturer. Marwick's Pianos, Inc., sells the pianos to its customers at an average price of $2,800 each. The selling and administrative costs that the company incurs in 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 $952 per month $4,793 per month, plus 5% of sales $63 per piano sold $664 per month $4,937 per month $13,594 per month $701 per month $2,487 per month, plus $44 per piano sold $937 per month During August, Marwick's Pianos, Inc., sold and delivered 64 pianos.

Answer 1

Solution

Marwick's Pianos Inc
Traditional Income Statement
For the Month of August
Sales revenue		$   179,200.00
Less: Cost of Goods sold		$       94,720.00
Gross Profit		$       84,480.00
Selling and Administrative Expense
Selling Expenses
Advertising	$             952.00
Sales salaries and Commission	$       13,753.00
Delivery Expense	$          4,032.00
Utilities	$             664.00
Depreciation of sales facility	$          4,937.00
Total Selling Expenses	$       24,338.00
Administrative Expenses
Executive Salaries	$       13,594.00
Insurance	$             701.00
Clerical	$          5,303.00
Depreciation- Office Equipment	$             937.00
Total Administrative expenses	$       20,535.00
Total Selling and Administrative Expense		$       44,873.00
Net income		$       39,607.00

.

Marwick's Pianos Inc
Contribution formal Income statement
For the Month of August
	Total	Per Piano
Sales	$    179,200.00	$         2,800.00
variable Expenses
Direct material cost	$       94,720.00	$         1,480.00
Variable Sales salaries and Commission	$          8,960.00	$             140.00
Delivery Expenses	$          4,032.00	$               63.00
Clerical	$          2,816.00	$               44.00
Total Variable Cost	$    110,528.00	$         1,727.00
Contribution Margin	$       68,672.00	$         1,073.00
Fixed costs
Advertising	$             952.00
Fixed Sales salaries and Commission	$          4,793.00
Utilities	$             664.00
Depreciation- Sales Facility	$          4,937.00
Executive salaries	$       13,594.00
Insurance	$             701.00
Clerical fixed cost	$          2,487.00
Depreciation- Office equipment	$             937.00
Total Fixed cost	$       29,065.00
Net Income	$       39,607.00