Marwick's Planos, Incorporated, purchases planos from a large manufacturer for an average cost of $1,506 per unit and th

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Marwick S Planos Incorporated Purchases Planos From A Large Manufacturer For An Average Cost Of 1 506 Per Unit And Th 1 (37.39 KiB) Viewed 34 times

Marwick S Planos Incorporated Purchases Planos From A Large Manufacturer For An Average Cost Of 1 506 Per Unit And Th 2 (61.63 KiB) Viewed 34 times

Marwick S Planos Incorporated Purchases Planos From A Large Manufacturer For An Average Cost Of 1 506 Per Unit And Th 3 (68.21 KiB) Viewed 34 times

Marwick's Planos, Incorporated, purchases planos from a large manufacturer for an average cost of $1,506 per unit and then sells them to retall customers for an average price of $2,900 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $945 per month $4,819 per month, plus 4% of sales $62 per piano sold $630 per month $4,960 per month Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Planos, Incorporated, sold and delivered 63 planos. $13,588 per month $703 per month $2,475 per month, plus $44 per piano sold $913 per month 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, Incorporated Contribution Format Income Statement For the Month of August Sales Variable expenses: Sales salaries and commissions Delivery of pianos Clerical Cost of goods sold Total variable expenses Contribution margin Fixed expenses; Advertising Sales salaries and commissions Utilities Depreciation of office equipment Depreciation of sales facilities Executive salaries Insurance Clerical Total fixed expenses Net operating income Total $ 182,700 7,308 3,906 94,878 106,092 945 4,819 630 913 4,960 13,588 703 2,475 29,033 33 < Required 1 $ Per Piano 2,900 116 62 44 1,506 1,728

Marwick's Planos, Incorporated Traditional Income Statement For the Month of August Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses: Advertising Sales salaries and commissions Delivery of pianos Utilities Depreciation of sales facilities Total selling expenses Administrative expenses: Executive salaries Insurance Clerical Depreciation of office equipment Total administrative expenses Total selling and administrative expenses Net operating income $ 945 12,127 3,906 630 4,960 22,568 13,588 703 5,247 913 20.451 $ 182,700 94,878 87,822 43,019 $ 44,803