Marwick's Pianos, Inc., purchases pianos from a large manufacturer and sells them at the retail level. The pianos cost, on the average, $1,494 each from the manufacturer. Marwick's Pianos, Inc., sells the pianos to its customers at an average price of $2,600 each. The selling and administrative costs that the company incurs in a typical month are presented below:
|Advertising||$949 per month|
|Sales salaries and commissions||$4,773 per month, plus 3% of sales|
|Delivery of pianos to customers||$59 per piano sold|
|Utilities||$637 per month|
|Depreciation of sales facilities||$5,034 per month|
|Executive salaries||$13,435 per month|
|Insurance||$697 per month|
|Clerical||$2,454 per month, plus $35 per piano sold|
|Depreciation of office equipment||$890 per month|
Prepare an income statement for Marwick's Pianos, Inc., for August. Use the traditional format, with costs organized by function.
Cost of Goods Sold:
Cos of goods sold accounts for the total manufacturing cost of all goods distributed to customers and are being sold.The cost of goods sold for a manufacturing company also accounts for the work in process goods and the finished goods.
Answer and Explanation:
Marwick's Oianos, Inc.
|Cost of Goods Sold||-1,494|
|Sales Salaries and Commissions||-4,851|
|Net Income (Net Loss)-28,935|
Since there are no number of units sold given, the writer just assumed one unit of sales.
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
from Accounting 101: Financial AccountingChapter 8 / Lesson 5