House of Organs, Inc., purchases organs from a well-known manufacturer - 17803

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Request Description

 

House of Organs, Inc., purchases organs from a well-known manufacturer and sells them at the retail level. The organs sell, on the average, for $2,500 each. The average cost of an organ from the manufacturer is $1,500. The costs that the company incurs in a typical month are presented below:

 

  Costs

  Cost Formula

  Selling:

 

       Advertising

  $950 per month

       Delivery of organs

  $60 per organ sold

       Sales salaries and commissions

  $4,800 per month, plus 4% of sales

       Utilities

  $650 per month

       Depreciation of sales facilities

  $5,000 per month

  Administrative:

 

       Executive salaries

  $13,500 per month

       Depreciation of office equipment

  $900 per month

       Clerical

  $2,500 per month, plus $40 per organ sold

       Insurance

  $700 per month


 

During November, the company sold and delivered 60 organs.

 

Required:

1.

Prepare a traditional income statement for November. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

2.

Prepare a contribution format income statement for November. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

 

Solution Description
“Do not hire a man who does your work for money, but him who does it for love of it.”

 

 

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Attachments
Ch 2 Q1.docx
Ch 2 Q1.docx