EXERCISE 5-12 (30 MINUTES)

1. - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH05 COST BEHAIVIOR ANALYSSIS AND USE 1. - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH05 COST BEHAIVIOR ANALYSSIS AND USE
SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH05 COST BEHAIVIOR ANALYSSIS AND USE
1. MARWICK’S PIANOS, INC. Income Statement For the Month of August Sales (40 pianos × $3,125 per piano) ... $125,000Less cost of goods sold (40 pianos × $2,450 per piano) ... 98,000 Gross margin ... 27,000 Less operating expenses: Selling expenses: Advertising ... $ 700 Sales salaries and commissions [$950 + (8% × $125,000)]... 10,950 Delivery of pianos (40 pianos × $30 per piano) ... 1,200 Utilities ... 350 Depreciation of sales facilities ... 800 Total selling expenses ... 14,000 Administrative expenses: Executive salaries... 2,500 Insurance... 400 Clerical [$1,000 + (40 pianos × $20 per piano)].... 1,800 Depreciation of office equipment... 300 Total administrative expenses ... 5,000 Total operating expenses ... 19,000 Net operating income ... $ 8,000Problem 5-14 (continued)