Reference no: EM132638365

Question - Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,485 per unit and then sells them to retail customers for an average price of $2,800 each. The company's selling and administrative costs for a typical month are presented below:

Costs Cost Formula

Selling: Advertising $968 per month

Sales salaries and commissions $4,826 per month, plus 4% of sales

Delivery of pianos to customers $57 per piano sold

Utilities $660 per month

Depreciation of sales facilities $5,028 per month

Administrative: Executive salaries $13,476 per month

Insurance $688 per month

Clerical $2,540 per month, plus $41 per piano sold

Depreciation of office equipment $929 per month

During August, Marwick's Pianos, Inc., sold and delivered 56 pianos.

Required -

1. Do traditional format income statement for August.

2. Do a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down through contribution margin.