Marwick’s Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,486 per...

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Marwick’s Pianos, Inc., purchases pianos from a largemanufacturer for an average cost of $1,486 per unit and then sellsthem to retail customers for an average price of $3,000 each. Thecompany’s selling and administrative costs for a typical month arepresented below: Costs Cost Formula Selling: Advertising $ 962 permonth Sales salaries and commissions $ 4,811 per month, plus 4% ofsales Delivery of pianos to customers $ 60 per piano sold Utilities$ 649 per month Depreciation of sales facilities $ 4,968 per monthAdministrative: Executive salaries $ 13,449 per month Insurance $708 per month Clerical $ 2,533 per month, plus $37 per piano soldDepreciation of office equipment $ 876 per month During August,Marwick’s Pianos, Inc., sold and delivered 60 pianos. Required: 1.Prepare a traditional format income statement for August. 2.Prepare a contribution format income statement for August. Showcosts and revenues on both a total and a per unit basis downthrough contribution margin.

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1 Marwicks Pianos Inc Traditional Format Income Statement For the month ended August 31 Sales 60 x 3000 180000 Cost of Goods Sold 60 x 1486 89160 Gross Profit 90840 Selling and Administrative Expenses Selling Expenses Advertising Expense 962 See Answer

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Marwick’s Pianos, Inc., purchases pianos from a largemanufacturer for an average cost of $1,486 per unit and then sellsthem to retail customers for an average price of $3,000 each. Thecompany’s selling and administrative costs for a typical month arepresented below: Costs Cost Formula Selling: Advertising $ 962 permonth Sales salaries and commissions $ 4,811 per month, plus 4% ofsales Delivery of pianos to customers $ 60 per piano sold Utilities$ 649 per month Depreciation of sales facilities $ 4,968 per monthAdministrative: Executive salaries $ 13,449 per month Insurance $708 per month Clerical $ 2,533 per month, plus $37 per piano soldDepreciation of office equipment $ 876 per month During August,Marwick’s Pianos, Inc., sold and delivered 60 pianos. Required: 1.Prepare a traditional format income statement for August. 2.Prepare a contribution format income statement for August. Showcosts and revenues on both a total and a per unit basis downthrough contribution margin.