House of Pianos, Inc., purchases pianos from a well-known manufacturer and sells
ID: 2550295 • Letter: H
Question
House of Pianos, Inc., purchases pianos from a well-known manufacturer and sells them at the retail level. The pianos sell, on the average, for $3,700 each. The average cost of a piano from the manufacturer is $1,480. The costs that the company incurs in a typical month are presented below Selling: Delivery of pianos Sales salaries and commissions Utilities Depreciation of sales facilities $751 per month $69 per piano sold $4,786 per month, plus 5% of sales $628 per month $4,906 per month -HEE Administrative Executive salaries Depreciation of office equipment Clerical Insurance $16,863 per month $936 per month $2,479 per month, plus $40 per piano sold $713 per month During November, the company sold and delivered 60 pianos. Required 1. Prepare a traditional income statement for November House of Pianos, Inc. Traditional Income Statement For the Month Ended November 30 Selling and administrative expenses: Selling expenses: Total selling expenses Administrative expenses:Explanation / Answer
Workings:
House Of Piaons, Inc. Traditional Income Statement For the Month Ended November 30 Sales $ 222,000 Cost of goods sold (-) $ 88,800 Gross Margin $ 133,200 Selling and administrative expenses: Selling expenses: Advertising $ 751 Delivery of Pianos (60X69) $ 4,140 Sales salaries and commissions $ 15,886 Utilities $ 628 Depreciation of sales facilities $ 4,906 Total selling expenses $ 26,311 Administrative expenses: Executive salaries $ 16,863 Depreciation of office equipment $ 936 Clerical $ 4,879 Insurance $ 713 Total administrative expenses $ 23,391 Total selling and administrative expenses $ 49,702 Net operating income $ 83,498Related Questions
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