管理会计quiz 3--ch 9 10.docx

QUIZ CH9/101. Contribution Format versus Traditional Income Statement（10 MARKS）Marwick’s Pianos, Inc., purchases pianos from a large manufacturer and sells them at the retail level. The pianos cost, on the average, $125 each from the manufacturer. Marwick’s Pianos, Inc., sells the pianos to its customers at an average price of $250 each. The selling and administrative costs that the company incurs in a typical month are presented below:CostsCost FormulaSelling:Advertising$800per monthSales salaries and commissions$1,200per month, plus 10% of salesDelivery of pianos to customers$15per piano soldUtilities$500per monthDepreciation of sales facilities$750per monthAdministrative:Executive salaries$2,000per monthInsurance$250per monthClerical$700per month, plus $5 per piano soldDepreciation of office equipment$400per monthDuring June, Marwick’s Pianos, Inc., sold and delivered 100 pianos.Required: 1. Prepare an income statement for Marwick’s Pianos, Inc., for June. Use the traditional format, with costs organized by function.2.Redo (1) above, this time using the contribution format, with costs organized by behavior. Show costs and revenues on both a total and a per unit basis down through contribution margin.3.Refer to the income statement you prepared in (2) above. Why might it be misleading to show the fixed costs on a per unit basis?2. Sales Mix; Break-Even Analysis; Margin of Safety（10 MARKS）Island Novelties, Inc., of Palau makes two products, Hawaiian Fantasy and Tahitian Joy. Present revenue, cost, and sales data for the two products follow:Hawaiian Fantasy Tahitian JoySelling price per unit$20.00$25.00Variable expenses per unit$14.00$10.00Number of units sold annually25,00010,000Fixed expenses total $270,000 per year. The Republic of Palau uses the U.S. dollar as its currency.Required:1.Assuming the sales mix given above, do the following:a.Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company