Question

Need contribution format income statement please.

Marwick's Pianos, Inc., purchases planos from a large manufacturer for an average cost of $1,505 per unit and then sells them to retail customers for an average price of $3,400 each. The company's selling and administrative costs for a typical month are presented below Cost Formula Song Advertising $950 per month Sales salaries and commissions 54,820 per month, plus 6% of sales Delivery of plans to customers $81 per piano sold Us 5667 per month Depreciation of sales facilites $5,009 per month Administrative Executive salaries $13.496 per month Insurance $700 per month Clerical $2,507 per month, plus $42 per piano sold Depreciation of office equipment $905 per month During August, Marwick's Pianos, Inc., sold and delivered 61 pianos. 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.

Answer 1

Marwick's Pianos Inc Traditional Income Statement for the month of August Sales $ 207,400 Cost of goods sold $ 91,805 Gross margin $ 115,595 Selling and administrative expenses Selling expenses: Advertising $ 950 sales salaries and commissions $ 17, 264 Delivery of Pianos $ 3,721 Utilities $ 667 Depreciation of sales facilities & 5,009. $ 27,611 Total selling expenses Administrative expenses Executive salaries Insurance Clerical $ 13,496 $ 700 $ 5,069 $ 905 $ 20,170 Depreciation of office equipment Total administrative expenses Total selling and administrative expenses Net operating income $ 47,78) $ 67, 814

calculation: Sales = (61 pianos * $3,400 per piano) = $207,400 Cost of goods sold = (61 pianos X $1,505 perpiano) = $91,805 Sales salaries and commissions = $4,820 +(6) X $207,400) = $4,820 + $12,444 = $ 17, 264 Delivery of píanos = ( 61 pianos * $ 61 per piano) = $3,721 & 42 per piano)] Clerical = [$2,507 + (61 pianos x = $2,507 + $2,562 = $ 5,069

Marwick's Pianos, Inc Contrubiction format Income Statement for the month of August Total Per Piano Sales $ 207,400 $3,400 Variable expenses: Sales salaries and commissions $ 12,444 1 & 204 Delivery of planos $ 3,721 & 61 Clerical $ 2,562 & 42 cost of goods sold $ 91,805 $ 1,505 $110,532 $ 96,868 $ 1,812 $1,588 Total variable expenses Contribution margin fixed expenses : Advertising Sales salaries and commission Vtilities Depreciation of office equipment Depreciation of sales facilities Executive salaries & 950 & 4,820 $ 667 & 905 $5,009 $ 13,496 & Too $ 2,507 Insurance Clerical $29,054 Total Net fixed expenses operating income $ 67,814

Calculation: Sales = ( 61 pianos x $3,400 per piano) = $207,400 Cost of goods sold = ( 61 pe'anos x $ 1,505 per piano) = $ 91,805 Sales salaries and commissions = ( 6% * $ 207,400) z $ 12, 444 Delivery of pianos = (61 pianos * & 61 per piano) - $3,721 Clerical & (61 pianos X & 42 per piano) = $2,562