advertising $936 per month sales salaries and commision $4,811 per month plus 6%
ID: 2611072 • Letter: A
Question
advertising $936 per month
sales salaries and commision $4,811 per month plus 6% of sales
delivery of pianos to customers $57 per sold piano
utilities $638 per month
depreciation of sales facilities $4983 per month
administrative:
executives salaries $13496 per month
insurance $719 per month
clerical $2458 per month plus $40 per piano sold
depreciation of office equipment $910 per month
3:04 PM ezto.mheducation.com T-Mobile LTE 77% Marwick's Pianos, Inc., purchases pianos from a large manufacturer and sells them at the retail level. The pianos cost, on the average, $1,498 each from the manufacturer Marwick's Pianos, Inc., sells the pianos to its customers at an average price of $2,400 each. The selling and administrative costs that the company incurs in a typical month are presented below 13498 per n During August, Marwick's Pianos, Inc., sold and delivered 58 planos. Required: 1. Prepare an income statement for Marwick's Pianos, Inc., for August. Use the traditional format, with costs organized by function. (A "Net operating loss" should be entered as a negative number.) 2. Prepare an income statement for Marwick's Pianos, Inc., for August, this time using the contribution format, with costs organized by behavior. Show costs and revenues on both a total and a per unit basis down through contribution margin. (A "Net operating loss" should be entered as a negative number.)Explanation / Answer
1) Income statement as per traditional format :
2) Income statement as per Variable or Contribution format :
Sales 58 pianos * 2400 $139200 Less: COGS 58*1498 -86884 Gross Profits $52316 Less: Expenses: Selling expenses: Advertising 936 sales salaries and commission (4811+8352) 13163 Delivery costs 57*58 3306 Utility 638 Depreciation - utilities 4983 Total Selling costs 23026 Income before admis expenses: 29290 Less: Administrative expenses : executive salary 13496 insurance 719 clerical (2458+2320) 4778 Depreciation - office equipment 910 Total Administration costs = 19903 Net Operating Income $9387Related Questions
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