Question

Marwick's Pianos, Inc, purchases pianos from a large manufacturer and sells them at the retail level. The pianos cnet on the average $1.491 each from the manufacturer, Marwick's Pianos, Inc, sells the pianos to s custamers at an average price of $3,000 aach. The selling and administralive costs hat the company in urs in ล typical month are presented below. $938 per month $4,786 per month, plus ธ% of sales 502 per piano sold 846 per month 54,997 per manth Delivery of pianos to customers Dopreciaion of sales facilitios Adninistrative $13,497 per month 5706 per month 52.531 per month, plus $40 per piana sold 871 per month Insurance Depreciation of office equipment During Augunt, Marwicks Pianos, Inc,sold and delivered 50 pianos Required costs organized by function. (A Net operating lose should be entered as a negative number. Marwick'e Planos, Inc. Traditional Income Statement For the Month of of goods sold Seling and administrative expenses Seling expenses Delivery of pianos ileiee of sales facilises Tetal seling e Executive salaries Cerical ctal seling and administraive expenons peraling income 2 Prepare an income sialomant for Marwick's Pianos, In.. for August, this time using the contibution format, with costs organized by behavior. Show costs and revenues on both a total and a per unit basis o through contribution margin.(A Net operating loee" should be enbered a9&negative number Marwick's Planos, Ine. Contribution Format Income Statament For the Month of August Total Cost of goods sold Cerical Delivery of pianos Total variable e bution margn Fixed expenses Executive salaries surance Cerical ctal foxed expenons peraling income

Answer 1

Marwick's Pianos Inc
Traditional Income Statement
For the Month of August
Sales revenue		$      1,77,000.00
Less: Cost of Goods sold		$          87,969.00
Gross Profit		$          89,031.00
Selling and Administrative Expense
Selling Expenses
Advertising	$               938.00
Sales salaries and Commission	$         13,636.00
Delivey Expense	$           3,658.00
Utilities	$               646.00
Depreciation of sales facility	$           4,997.00
Total Selling Expenses	$         23,875.00
Administrative Expenses
Executive Salaries	$         13,497.00
Insurance	$               706.00
Clerical	$           4,891.00
Depreciation- Office Equipment	$               871.00
Total Administrative expenses	$         19,965.00
Total Selling and Administrative Expense		$          43,840.00
Net income		$          45,191.00

.

Marwick's Pianos Inc
Contribution formal Income statement
For the Month of August
	Total	Per Piano
Sales	$     1,77,000.00	$            3,000.00
variable Expenses
Direct material cost	$         87,969.00	$            1,491.00
Variable Sales salaries and Commission	$           8,850.00	$                150.00
Delivery Expenses	$           3,658.00	$                  62.00
Clerical	$           2,360.00	$                  40.00
Total Variable Cost	$     1,02,837.00	$            1,743.00
Contribution Margin	$         74,163.00	$            1,257.00
Fixed costs
Advertising	$               938.00
Fixed Sales salaries and Commission	$           4,786.00
Utilities	$               646.00
Depreciation- Sales Facility	$           4,997.00
Executive salaries	$         13,497.00
Insurance	$               706.00
Clerical fixed cost	$           2,531.00
Depreciation- Office equipment	$               871.00
Total Fixed cost	$         28,972.00
Net Income	$         45,191.00