Marwicks Pianos Inc purchases pianos from a large manufactur

Marwick\'s Pianos, Inc., purchases pianos from a large manufacturer and sells them at the retail level. The planos cost, on the average, $1,493 each from the manufacturer, Marwick\'s Pianos, Inc, sells the pianos to its customers at an average price of $3,200 each. The selling and administrative costs that the company incurs in a typical month are presented below $943 per month $4,829 per month, plus 4% of sales Sales salaries and commissions Delivery of pianos to customers $59 per piano sold Utilies Depreciation of sales facilities $640 per month $5,099 per month Administrative Executive salaries Insurance Clerical Depreciation of office equipment $13,573 per month $684 per month $2,544 per month, plus $40 per piano sold $898 per month During August, Marwick\'s Planos, Inc, sold and delivered 55 pianos ired: 1. Prepare an income statement for Marwick\'s Pianos, Inc, for August Use the traditional format, with costs organized by function (A \"Net operating loss\" should be entered as a negative number.) Traditional Income Statement For the Month of A S 176.000 82,115 93,885 Cost of goods sold Selling and administrative expenses Selling expenses Sales salacies and commissions O Type here to search 6 7 8

Solution

Part 1

Marwick\'s Pianos Inc.

Traditional income statement

For the Month of August

176000

(55*3200)

82115

(55*1493)

11869

(4829+(4%*176000)

3245

(55*59)

4744

(2544+(55*40))

Part 2

Marwick\'s Pianaos Inc

Contribution format income statement

For the Month of August

176000

(55*3200)

7040

(55*128)

3245

(55*59)

2200

(55*40)

82115

(55*1493)

Sales		176000 (55*3200)
Cost of goods sold		82115 (55*1493)
Gross margin		93885 (176000-82115)
Selling and administrative expenses:
Selling expenses :
Advertising	943
Sales Salaries and commissions	11869 (4829+(4%*176000)
Dilvery of pianos	3245 (55*59)
Utilities	640
Depreciation of sales facilities	5099
Total selling expenses	21796
Administrative expenses :
Executive Salaries	13573
Clerical	4744 (2544+(55*40))
Insurance	684
Depreciation on office equipment	898
Total administrative expenses	19899
Total selling and administrative expenses		41695
Net operating income		52190