House of Organs, Inc., purchases organs from a well-known manufacturer and sells
ID: 2373112 • Letter: H
Question
House of Organs, Inc., purchases organs from a well-known manufacturer and sells them at the retail level. The organs sell, on the average, for $3,100 each. The average cost of an organ from the manufacturer is $1,508. The costs that the company incurs in a typical month are presented below:
Costs Cost Formula
Selling:
Advertising $950 per month
Delivery of organs $59 per organ sold
Sales salaries and commissions $4,812 per month, plus 4% of sales
Utilities $642 per month
Depreciation of sales facilities $4,916 per month
Administrative:
Executive salaries $13,489 per month
Depreciation of office equipment $901 per month
Clerical $2,541 per month, plus $41 per organ sold
Insurance $717 per month
During November, the company sold and delivered 55 organs.
Prepare a traditional income statement for November. (Input all amounts as positive values except losses which should be indicated by a minus sign.)
House of Organs, Inc.
Traditional Income Statement
For the Month Ended November 30
Selling and administrative expenses:
Selling expenses:
Total selling expenses
Administrative expenses:
Total administrative expenses
Total selling and administrative expenses
Prepare a contribution format income statement for November.
House Of Organs, Inc.
Contribution Format Income Statement
For the Month Ended November 30
Total Per unit
$ $
Variable expenses:
Total variable expenses
Contribution margin $
Fixed expenses:
Total fixed expenses
Explanation / Answer
1.
sales: 60*3100 186000
cost of good sold : 60*1508 90480
delievery of organs: 59*60
sales and salaries commission: 4812+4 % 1860000 12252
clerical: 2541 +60*41 5001
2.
sales: 60*3100 186000
cost of good sold : 60*1508 90480
delievery of organs: 59*60
sales and salaries commission: 4 % 1860000 7440
clerical: 60*41 2460
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