Answer Happy

Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6] Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,504 per unit and then sells them to retail customers for an average price of $3,200 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 Depreciation of sales facilities Depre Administrative: Cost Formula $964 per month $4,818 per month, plus 5% of sales $61 per piano sold $655 per month $4,973 per month Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 63 pianos. $13,520 per month $686 per month $2,512 per month, plus $45 per piano sold $907 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. Required 1 Required 2 Complete this question by entering your answers in the tabs below. Prepare a traditional format income statement for August. (A "Net operating loss" should be entered as a negative number.)

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 Selling expenses Total selling expenses Administrative expenses: Executive salaries Insurance Clerical Depreciation of office equipment Total administrative expenses Total selling and administrative expenses Net operating income 0 0 0

Contribution Format Income Statement For the Month of August Variable expenses: Total variable expenses Contribution margin Fixed expenses: Total fixed expenses Total 0 0 Per Piano 0