Marwick's Pianos, Incorporated, 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 Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $700 per month $950 per month, plus 8% of sales. $30 per piano sold $350 per month $800 per month Depreciation of sales facilities. Administrative: Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 40 pianos. $2,500 per month $400 per month $1,000 per month, plus $ 20 per piano sold $300 per month Required: 1. Prepare a traditional format income statement for August.

Marwick's Pianos, Incorporated, 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 Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $700 per month $950 per month, plus 8% of sales. $30 per piano sold $350 per month $800 per month Depreciation of sales facilities. Administrative: Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 40 pianos. $2,500 per month $400 per month $1,000 per month, plus $ 20 per piano sold $300 per month Required: 1. Prepare a traditional format income statement for August.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 26P

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Maria Cohen is employed as a salesperson in the mens department of Lees Fashions. In addition to her weekly base salary of 400 (35-hour week), Cohen is paid a commission of 1% on her total net sales for the week (total gross sales less any customer returns). During the past week, to promote the sale of its fine cashmere sweaters, Lees agreed to pay Cohen an additional PM (push money) of 3% of the total net sales of cashmere sweaters. Cohens weekly sales tally is given below. Compute Cohens total weekly earnings, showing her (a) weekly base salary, (b) commission, (c) PM, and (d) total weekly earnings.
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