8. House of Furniture, Inc., purchases from a well known manufacturer and sells them at the retail level. Each set is sold at the rate of $2,500. The average cost of each set of furniture from the manufacturer is $1,500. The costs that the company incurs in a month are presented below: Cost Selling Costs Advertising $950 per month Delivery expenses $60 per set sold Salaries and commission $4,800 per month, plus 4% of sales Depreciation of sales facilities $5,000 per month Other selling expenses $650 per month Administrative Costs Executive salary $13,500 per month Depreciation of office equipment $900 per month Clerical expenses $2,500 per month plus $40 per set sold Insurance $700 per month During November, the company sold and delivered 60 furniture sets. Required: a. Prepare a traditional income statement for November b. Prepare a contribution format income statement. Show costs and revenues on both a total and a per unit basis down through contribution margin.

8. House of Furniture, Inc., purchases from a well known manufacturer and sells them at the retail level. Each set is sold at the rate of $2,500. The average cost of each set of furniture from the manufacturer is $1,500. The costs that the company incurs in a month are presented below: Cost Selling Costs Advertising $950 per month Delivery expenses $60 per set sold Salaries and commission $4,800 per month, plus 4% of sales Depreciation of sales facilities $5,000 per month Other selling expenses $650 per month Administrative Costs Executive salary $13,500 per month Depreciation of office equipment $900 per month Clerical expenses $2,500 per month plus $40 per set sold Insurance $700 per month During November, the company sold and delivered 60 furniture sets. Required: a. Prepare a traditional income statement for November b. Prepare a contribution format income statement. Show costs and revenues on both a total and a per unit basis down through contribution margin.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....

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