Reference no: EM132478816

Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $2,450 per unit and then sells them to retail customers for an average price of $3,125 each. The company's selling and administrative costs for a typical month are presented below:

Costs Cost Formula Selling:

Advertising $ 700 per month

Sales salaries and commissions $ 950 per month, plus 8% of sales

Delivery of pianos to customers $ 30 per piano sold

Utilities $ 350 per month

Depreciation of sales facilities $ 800 per month

Administrative:

Executive salaries $ 2,500 per month

Insurance $ 400 per month

Clerical $ 1,000 per month, plus $20 per piano sold

Depreciation of office equipment $ 300 per month

1. During August, Marwick's Pianos, Inc., sold and delivered 40 pianos.

Question 1: How do a traditional format income statement for August.

Question 2: How 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.