Reference no: EM132507712

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 $2,600 each. The average cost of a piano from the manufacturer is $1,750.

House of Pianos, Inc. has always kept careful records of its costs. The costs that the company incurs in a typical month are presented below:

Costs

Cost Formula

Selling:

Advertising                                                    $1,650.00 per month

Delivery of Pianos                                            $80.00 per piano sold

Sales Salaries and Commissions                            $3,500.00 per month, plus 3% of sales

Utilities                                                            $800.00 per month

Depreciation of Sales Facilities                              $4,600.00 per month

Administrative:

Executive Salaries                                             $15,500.00 per month

Depreciation of Office Equipment                         $700.00 per month

Clerical                                                           $2,900.00 per month, plus $50 per piano sold

Insurance                                                       $750.00 per month

During November, the company sold and delivered 95 pianos.

Question 1: Prepare a Contribution Format income statement for November with costs organized by behaviour. Show costs and revenues on both a total and a per unit basis down through contribution margin.