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Marwick's Pianos, Inc., purchases pianos from a large
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Marwick?s Pianos, Inc., purchases pianos from a large manufacturer and sells them at the retail level. The pianos cost, on the average, $1,513 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:

 

  Costs   Cost Formula
  Selling:  
       Advertising   $963 per month
       Sales salaries and commissions   $4,789 per month, plus 4% of sales
       Delivery of pianos to customers   $57 per piano sold
       Utilities   $654 per month
       Depreciation of sales facilities   $5,002 per month
  Administrative:  
       Executive salaries   $13,474 per month
       Insurance   $695 per month
       Clerical   $2,464 per month, plus $41 per piano sold
       Depreciation of office equipment

  $868 per month

 







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This question was answered on: Feb 21, 2020

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