Reference no: EM132469993

Marwick's Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,497 per unit and then sells them to retail customers for an average price of $2,600 each. The company's selling and administrative costs for a typical month are presented below:

CostsCost FormulaSelling: Advertising$938 per month

Sales salaries and commissions$4,815 per month,

plus 4% of salesDelivery of pianos to customers$62 per piano

soldUtilities$660 per month

Depreciation of sales facilities$5,052 per month

Administrative: Executive salaries$13,416 per month

Insurance$692 per month

Clerical$2,501 per month,

plus $42 per piano sold

Depreciation of office equipment$876 per month

During August, Marwick's Pianos, Inc., sold and delivered 63 pianos.

Required:

Question 1. Make traditional format income statement for August.

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